Today's Must Read
PayPal (PYPL) Rides on Strategic Partnerships, Risks Remain
ConocoPhillips (COP) Banks on Eagle Ford Acreage, Debts High
Tuesday, June 12, 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 United Technologies (UTX), PayPal (PYPL) and ConocoPhillips (COP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
United Technologies’ shares have gained +6.8% in the last year, outperforming the Zacks Diversified Operations industry, which has lost -14% over the same period. United Technologies serves various end-markets. The Zacks analyst thinks that this allows it to remain profitable even during tough economic times.
The company has offered bullish guidance for 2018 on healthy demand trends and is likely to deliver sustainable earnings growth in future with Rockwell merger. United Technologies remains focused on four key priorities: flawless execution, innovation, structural cost reduction and disciplined capital allocation to fuel its growth engine. However, fluctuations in foreign currency exchange rates may affect the company’s bottom-line growth.
In addition, a disruption in deliveries from suppliers, capacity constraints, production disruptions, price changes or decreased availability of raw materials or commodities is likely to have an adverse effect on the company’s ability to meet delivery schedules, thereby increasing its operating costs.
Shares of PayPal have outperformed the Zacks Internet Software industry over the last year (+61.1% vs. +35%). PayPal continues to benefit from its ongoing strategic partnerships as well as new partnerships with CaixaBank, Bankia, HSBC and Barclays Bank, which remain positive for its improving customer base.
Additionally, the introduction of new services and offers for the debit and credit card users are helping it to attract new customers to the platform. The Zacks analyst thinks an expanding product & services portfolio and strengthening presence in global market will continue to benefit the company’s total payment volume.
Further, a new agreement with eBay will make PayPal the former’s payment partner, which will help the company to recover what it had lost from the discontinuation of the previous partnership between the two companies. However, continuous exposure to foreign exchange and interest rate risks are major concerns. Also, intensifying competition from major players in the market remains a headwind.
ConocoPhillips’ shares are up +51.8% over the last year, outperforming the Zacks U.S. Integrated Oil industry, which has gained +38.3% over the same period. As oil prices continue to improve, ConocoPhillips gains from more oil production in the Eagle Ford and Bakken as well as concentrating on high-margin production region.
Significant opportunities are left for ConocoPhillips in the Eagle Ford where it owns 3,400 undrilled locations that could lend access to almost 2.3 billion barrels of oil equivalent estimated potential reserves. However, the Zacks analyst is cautious about ConocoPhillips’ expectations of a rise in production and operating expenses.
For 2018, the firm projects production and operating expenses at $5.7 billion, higher than $5.2 billion for 2017. Moreover, ConocoPhillips’ long-term debt is more than double its cash balance, which is a concern.
Other noteworthy reports we are featuring today include Anthem (ANTM), Raytheon (RTN) and Tesla (TSLA).
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>>>