Today's Must Read
Momentum in PepsiCo's (PEP) Beverage Business Aid Volume
High Deposit Aids Wells Fargo (WFC), Legal Issues Exacerbate
Friday, September 10, 2021
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 Corporation (BAC), PepsiCo, Inc. (PEP), and Wells Fargo & Company (WFC). 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 >>>
Shares of Bank of America have outperformed the Zacks Major Regional Banks industry in the year to date period (+34.7% vs. +29.8%). The Zacks analyst believes that efforts to improve revenue growth, a strong balance sheet and expansion into new markets are some of the major factors that are likely to support Bank of America’s near-term growth.
Opening of new branches, enhancing digital capabilities, strategic acquisitions and initiatives to manage costs will keep supporting profitability. The company’s robust capital deployment activities will keep enhancing its shareholder value. Lower interest rates and the Federal Reserve’s decision to the same unchanged in near term are expected to keep hurting the company’s margins though.
PepsiCo shares have gained +18.2% in the past six months against the Zacks Soft Drinks Beverages industry’s gain of +13.3%. The Zacks analyst believes that the company continues to gain from brand investments, go-to-market systems, manufacturing capacity and digital capabilities to build competitive advantages.
PepsiCo continued its robust surprise trend for the 10th straight quarter in second-quarter 2021. It witnessed strong revenue growth across developed and developing as well as emerging economies as the impacts related to closures subsided. The beverage industry, however, presents substantial challenges for PepsiCo, primarily related to dynamic retail and consumer landscape, as well as operating and commodity cost inflation.
Shares of Wells Fargo have lost -2.6% in the last three months against the Zacks Major Regional Banks industry’s loss of -1.9%, however, the company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in all of the trailing four quarters. The Zacks analyst believes that it continues to benefit from deposit growth, strong capital position and improving credit quality.
Subsequent to the clearance of this year’s stress test, the company doubled the dividend for third-quarter 2021 in July. Also, it boosted its share-repurchase authorization to approximately $18 billion for the period between third-quarter 2021 and second-quarter 2022. Declining revenues due to low interest rates and volatile fee income are major headwinds though.
Other noteworthy reports we are featuring today include T-Mobile US, Inc. (TMUS), Amgen Inc. (AMGN) and Enbridge Inc. (ENB).
Director of Research
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>>>