Today's Must Read
Branch Opening, Higher Rate Aid BofA (BAC), Fee Income a Woe
Higher Premiums Aid Chubb Limited (CB), Rising Costs Ail
Tuesday, May 29, 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 Nike (NKE), Bank of America (BAC) and Chubb (CB). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Nike’s shares have outperformed the Zacks Shoes and Retail Apparel industry over the last six months (+19.5% vs. +17.3%), driven by strength in international business and the global NIKE Direct business which has been aiding its quarterly performance. Notably, the company delivered top- and bottom-line beat in third-quarter fiscal 2018 which also marked the 23rd straight earnings beat.
Nike closed the third quarter with expectations of a trend reversal in its North America business in the fourth quarter, backed by the introduction of new innovation platforms and differentiated customer experiences in the marketplace. Consequently, it provided robust guidance for fourth-quarter fiscal 2018 and initial view for fiscal 2019. However, its higher SG&A expenses are likely to continue hurting results in the fourth quarter.
Bank of America’s shares have outperformed the Zacks Major Regional Banks industry over the last six months, gaining +7% vs. +1.6%. The company possesses an impressive earnings surprise history, beating expectations in each of the trailing four quarters. Its first quarter 2018 results benefited from higher rates, increase in equity trading income and lower expenses.
The Zacks analyst thinks increase in loan and deposit balances, rising interest rates, and efforts to manage expenses as well as expand into new markets will support profitability. However, a fall in mortgage banking income due to lower volumes and a decline in refinancing activity along with uncertainty related to performance of capital markets remain major concerns. These are expected to hurt the bank's revenues to some extent.
Chubb’s shares have lost -12.2% over the past six months, underperforming the Zacks Property, Casualty and Title industry, which has declined -0.2% over the same period. Chubb’s first-quarter 2018 earnings beat expectations but deteriorated year over year on higher catastrophe loss.
However, Chubb stands a good chance of leading the P&C space, benefiting from compelling products as well as services. The company’s inorganic growth story is impressive, helping it achieve a higher long-term ROE. Increased scales, efficiencies and a solid balance sheet will give Chubb a competitive edge. A strong capital position aids Chubb to boost shareholders’ value and invest in strategic initiatives to drive growth.
The company is on track to achieve annual run-rate integration-related savings of $875 million by the end of 2018. But, exposure to cat loss induces volatility in underwriting profitability. Escalating expenses too weigh on margin expansion.
Other noteworthy reports we are featuring today include DISH Network (DISH), Hawaiian Electric (HE) and Ameren (AEE).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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>>>