Today's Must Read
Infrastructure Spending, Rise in Customer Base Aids NextEra (NEE)
Solid Balance Sheet, Revenue Growth Aid MetLife (MET)
Thursday, May 10, 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 Schwab (SCHW), NextEra (NEE) and MetLife (MET). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Schwab’s shares have outperformed the Zacks Investment Brokers industry over the last six months, gaining +31.7% vs +15.6%. The company has positive record of earnings surprises in recent quarters, having surpassed expectations in three of the trailing four quarters. Its first-quarter 2018 results benefited from higher revenues, partly offset by higher expenses.
The Zacks analyst thinks the company remains well positioned to gain from the rising rate environment and its initiatives to strengthen trading income. Further, the benefits from tax act will aid financials. However, continuous rise in expenses (due to rise in compensation costs) are expected to hurt bottom-line growth. Also, the company’s significant dependence on fee-based income remains a concern and might hamper its financials in the near term.
Shares of NextEra have outperformed the Zacks Electric Power industry over the last year (the stock is up +17.5% vs. -4.1% decline for the industry). NextEra Energy’s first-quarter earnings were better than expectations, thanks to strong contribution from its segments. The Zacks analyst thinks NextEra Energy’s investment to strengthen its infrastructure and ongoing capital projects, when completed, will help it serve its expanding customer base more efficiently.
The company’s focus on clean energy has helped it lower emission levels and use of new technology has saved on energy bills for its customers. The natural gas pipelines, which came online in first half of 2017, are expected to boost its performance.
However, the company’s nature of business is subject to complex and comprehensive federal, state and other regulations. Despite investments made to strengthen its infrastructure the unpredictable nature of natural disaster could derail normal operation and impact profitability.
Buy-ranked MetLife’s shares have gained +4.4% over the last three months, outperforming the Zacks Multi-Line Insurance industry, which has lost -2.9% over the same period. The Zacks analyst likes the company’s efforts to streamline business, only to focus on core business, are really impressive.
Its revenues grew in 2017 after declining for two years and the trend is likely to continue in 2018. Its strong international operations and disciplined capital management should drive long-term growth. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 2.9% upward over the last 30 days.
MetLife, Inc.’s first-quarter earnings of $1.36 per share beat expectations but declined 7% year over year. The quarter benefited from favorable underwriting, volume growth and a favorable impact of the tax reform. Nevertheless, exposure to catastrophe losses and investment in efficiency programs will put pressure on margins.
Other noteworthy reports we are featuring today include Anadarko Petroleum (APC), Williams Partners (WPZ) and Digital Realty (DLR).
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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>>>