Today's Must Read
ConocoPhillips (COP) to Gain on Oil-Rich Eagle Ford Acreage
Network Density & Sprint Deal Aid T-Mobile (TMUS), Opex Ails
Monday, July 16, 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 PayPal (PYPL), ConocoPhillips (COP) and T-Mobile (TMUS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
PayPal’s shares have outperformed the Zacks Internet Software industry over the last year (+52.8% vs. +35.3%). The Zacks analyst thinks PayPal continues to benefit from its growing number of acquisitions and strategic partnerships with CaixaBank, Bankia, HSBC and Barclays Bank. All these 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. This will continue to benefit the company’s total payment volume. Further, new agreement with eBay will make PayPal as former’s payment partner, which will help the company to recover what it had lost from the discontinuation of previous partnership between the two companies.
Estimates have been stable lately ahead of the company’s Q2 earnings release. The company has positive record of earnings surprises in recent quarters. However, foreign exchange fluctuations, interest rate risks and intensifying competition are major concerns.
Shares of Strong Buy-ranked ConocoPhillips are up +66.8% over the last year, outperforming the Zacks U.S. Integrated Oil industry, which has gained +44% over the same period. ConocoPhillips is one of the largest exploration and production players in the world based on proved reserves and production.
The Zacks analyst likes the company’s initiative to divest non-core assets as the explorer could divert the proceeds toward oil-rich Eagle Ford shale, Delaware basin and Bakken shale. In fact, there are significant opportunities for the firm in the Eagle Ford where it owns about 3,400 undrilled locations. Strong focus on these prospective resources is expected to help ConocoPhillips achieve its target of 22% compound annual growth rate (CAGR) of production through 2017 to 2020.
The oil and gas explorer is also strongly committed toward returning cash to stockholders as reflected by the firm’s decision to boost the 2018 share buyback plan to $3 billion from the prior projection of $2 billion.
T-Mobile’s shares have outperformed the Zacks National Wireless industry over the last three months, losing -2.1% vs. -2.5%. T-Mobile has rolled out 600 MHz wireless spectrum across its footprints and conducted Narrowband Internet of Things tests. T-Mobile and Sprint have agreed to merge.
The Zacks analyst thinks the deal will help accelerate development of faster 5G wireless networks. The combined entity will have about 127 million customers. It will experience the network capacity to rapidly create a nationwide 5G network. T-Mobile’s innovative network expansion methodologies continue to be faster and technologically sounder.
However, a competitive and saturated wireless market and high costs of the low-priced promotional plans remain major headwinds. The company has increased its top-line by adding customers but compromised on its profitability. Industry consolidation and intense competition could limit T-Mobile’s ability to attract and retain customers and may adversely affect its operating results.
Other noteworthy reports we are featuring today include Ecolab (ECL), Zoetis (ZTS) and PACCAR (PCAR).
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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>>>