Today's Must Read
Acquisitions, Investments in Technology Aid Mastercard (MA)
Global Expansion to Aid Itau Unibanco (ITUB), High Cost Ails
Wednesday, March 8, 2018
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Royal Dutch Shell (RDS.A), Mastercard (MA) and Itau Unibanco Banco (ITUB). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Royal Dutch Shell’s shares have gained 23.5% over the last one year, outperforming the Zacks Integrated Oil industry, which has gained 8.3% over the same period. Such performance was primarily supported by the company’s impressive earnings surprise history, having surpassed expectations in three of the trailing four quarters.
The company finished 2017 on a solid note with the integrated behemoth's fourth-quarter upstream unit profit soaring from the year-ago period thanks to steady commodity price recovery. Importantly, the Anglo-Dutch company generated healthy cash flows yet again, allowing it to cut debt and cover its cash dividend. However, with production volumes going down, Shell's near-to-medium term revenue outlook remains cloudy.
Shares of Mastercard have increased 61.8% over the last one year, significantly outperforming the Zacks Financial Transaction Services industry’s gain of 36.6% during the same period. The company is well positioned for growth, given its solid market position, ongoing expansion and digital initiatives, and significant opportunities from the secular shift toward electronic payments.
The acquisitions of VocaLink and NuData Security complement the company’s efforts to participate in new payment flows and enhance its safety and security offerings. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 10% upward over the last 60 days.
However, the company continues to face increasing costs. Moreover, higher incentives and rewards will put pressure on the bottom line.
Itau Unibanco Banco’s shares have outperformed the Zacks Foreign Banks industry over the past six months, gaining 16.1% vs 4.7%. The company remains focused on building strategies to expand inorganically. In December 2016, it completed the acquisition of 40% equity stake in Itau BMG Consignado.
Further, it has been diversifying its loan composition with focus on origination of products with lower risks and more guarantees. However, rising operational risk, with management's expectation of non-interest expenses to grow in the range of 0.5-3.5% in 2018, remains a concern.
Other noteworthy reports we are featuring today include Fresenius Medical Care (FMS), Suncor Energy (SU) and Incyte (INCY).
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Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>