Today's Must Read
Visa (V) Gains from Continuous Investment in Technology
BHP Billiton (BHP) Braves Headwinds With Higher Mining Yield
Wednesday, April 4, 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 Amazon (AMZN), Visa (V) and BHP Billiton (BHP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Strong Buy-rated Amazon’s shares have outperformed the broader market in the last year (the stock is up +53.1% vs. the +11.3% gain for the S&P 500 as a whole). Amazon’s expanding AWS enterprise customer base is driving top-line growth. Its increasing number of paid Prime members is positive.
The Zacks analyst thinks the company is benefiting from strong growth in the retail business, which remains very hard to beat on price, choice and convenience. Amazon has a solid loyalty system in Prime and its FBA strategy and content addition continue to add selection to Prime memberships.
AWS generates much higher margins than retail, thus significantly impacting Amazon’s profitability. However, increased operating expenses to support expansion of its business into new markets and territories, localize the availability of products and grow its content will keep margins under pressure.
Shares of Buy-rated Visa have outperformed the Zacks Financial Transaction Services industry over the last one year (+33.9% vs. +32.8%). The Zacks analyst likes the company's key business drivers, payments volume, cross model volume and process transactions, which have remained strong and stable across the globe.
Numerous strategic acquisitions and alliances, technology upgrades and effective marketing have paved the way for its long-term growth that have led to consistent revenue growth over the past several years. Visa is well poised to gain from the growing electronic payment processing and strong international business.
A solid balance sheet ensures effective capital deployment. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 1.1% upward over the last 60 days. Nevertheless, high client incentives, forex volatility are some of the headwinds.
BHP Billiton’s shares have outperformed the Zacks Mining-Miscellaneous industry over the last three months (+7% vs. +4.1%). Declining iron-ore prices will likely weigh over the company’s revenues and profitability in the near term. Headwinds like stiff industry rivalry or a supply glut in the market remain other causes of concern.
However, the Zacks analyst thinks the company has been boosting its competency on the back of sturdier productivity gains. Moreover, BHP Billiton is deleveraging its balance sheet with increased free cash flow generation.
The company also remains on track to provide increased returns to shareholders. Over the last 30 days, the Zacks Consensus Estimate for the stock remained unchanged for fiscal 2018 and 2019.
Other noteworthy reports we are featuring today include NextEra (NEE), Mondelez (MDLZ) and Alibaba (BABA).
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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>>>