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Research Daily

Tuesday, July 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 Union Pacific (UNP), Twenty-First Century Fox (FOXA) and BP plc (BP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Union Pacific’s shares have outperformed the Zacks Rail industry (+33.6% vs. +20.6%) as well as fellow railroad operator Norfolk Southern Corp. (+28.3%) in the last one year. The Zacks analyst expects Union Pacific to perform well in the second quarter of 2018 as well. Detailed results should be out on Jul 19.

Higher freight revenues are expected to boost the company’s second-quarter results. The metric is likely to increase on the back of overall volume growth among other factors.

The company's efforts to reward shareholders are also impressive. At its Investor Day on May 31, Union Pacific stated that it intends to repurchase shares worth $20 billion during 2018-20 period. Dividend payout ratio in the period is anticipated between 40% and 45%.

However, high operating expenses and debt levels remain concerns. Declining automotive volumes due to sluggish vehicle production in the United States is also worrisome.

(You can read the full research report on Union Pacific here >>>).

Shares of Twenty-First Century Fox have increased +76.4% over the last year, outperforming the Zacks Film and Television industry, which has gained +58.5% over the same period. The Zacks analyst thinks Twenty-First Century Fox continues to benefit from rise in retransmission and robust advertising demand for its live content and entertainment products.

The company is now rumored to bid higher for the remaining 61% stake in Europe’s leading pay-TV broadcaster Sky plc to counter Comcast's aggressive bid. Further, the ongoing tussle between Disney and Comcast over Fox’s assets bodes well for investors.

Although Disney’s latest bid is beneficial for shareholders, Comcast is highly anticipated to raise its all-cash bid, providing better returns to investors. However, increasing cable networking programming cost is a headwind.

(You can read the full research report on Twenty-First Century Fox here >>>).

Strong Buy-ranked BP’s shares are up +35.7% over the last year, outperforming the Zacks International Integrated Oil industry (up +23.7%). The integrated energy company has been gaining on the back of a strong portfolio of upstream projects.

Since 2016, BP has placed 15 key upstream projects online, including Atoll Phase 1 & Shah Deniz 2. All those developments are backing the British energy giant to boost production by 900 thousand barrel of oil equivalent per day (MBOE/D) by 2021.

Moreover, the company has a strong commitment in returning cash back to the shareholders through share buybacks and dividend payments. BP pays lucrative dividend yield as the current yield of 5.1% is significantly higher than S&P 500’s 1.8%. In fact, over the past few years, the company has been persistently paying higher dividend yield than S&P 500.

(You can read the full research report on BP here >>>).

Other noteworthy reports we are featuring today include Allergan (AGN), Mondelez (MDLZ) and TOTAL (TOT).

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Mark Vickery

Senior Editor

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>>>

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