Today's Must Read
BP Plc (BP) Banks on Upstream Projects Amid Oil Spill Woes
Solid Order Growth, Favorable Budget Boost Lockheed (LMT)
Wednesday, July 25, 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 Bank of America (BAC), BP Plc (BP) and Lockheed Martin (LMT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Bank of America’s shares have outperformed the Zacks Major Regional Banks industry year to date, gaining +4.5% vs. +1%. Also, the company possesses an impressive earnings surprise history, beating expectations in each of the trailing four quarters.
The company’s second-quarter 2018 earnings were supported by higher net interest income, card income and trading income. A fall in operating costs was also a positive. However, investment and mortgage banking fees declined.
The Zacks analyst thinks rise in loan and deposit balances, interest rates and efforts to manage expenses as well as expand into new markets will support profitability. Also, lower tax rates and easing of banking regulations will aid growth.
Further, approval of its capital plan reflects strong balance sheet position. However, 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.
Shares of BP are up +28.7% over the last year, outperforming the Zacks International Integrated Oil industry (up +19.2%). 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. However, the oil spill incident of 2010 in the BP-operated Macondo prospect continues to affect the company. BP anticipates cash out flow related to the incident of $3 billion through 2018 against the prior projection of slightly more than $2 billion.
(You can read the full research report on BP here >>>).
Buy-ranked Lockheed Martin’s shares have gained +0.5% year to date, underperforming the Zacks Aerospace Defense sector, which has gained +9.3% over the same period. But Lockheed Martin ended second quarter 2018 on an impressive note, with both its top and bottom-line having comfortably surpassed expectations.
Being the largest defense contractor in the world, Lockheed Martin experiences strong demand for its high-end military equipment in domestic as well as international markets. Consequently, strong order growth has been a primary growth driver for this company.
The Zacks analyst thinks Lockheed Martin continues to be a strong cash generator, helping it to take important cash deployment decisions. The recent adoption of expansionary budgetary policies in the United States will immensely boost this defense prime's business growth. However, the company faces intense competition for its broad portfolio of products and services in both domestic and international markets.
Other noteworthy reports we are featuring today include V.F. Corp. (VFC), Halliburton (HAL) and Rogers Communications (RCI).
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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>>>