Today's Must Read
RRPs to Aid Altria (MO), Soft Cigarette Volumes a Concern
Subscriber Gain, Wireless Initiatives Benefit Charter (CHTR)
Tuesday, September 4, 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 JPMorgan (JPM), Altria (MO) and Charter Communications (CHTR). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
JPMorgan’s shares have outperformed the Zacks Major Regional Banks industry over the last six months (-0.4% vs. -2.8%). Also, the company has an impressive earnings surprise history, having surpassed expectations in each of the trailing four quarters.
The Zacks analyst thinks expansion into new markets, focus on strengthening the card business, higher interest rates and rising loan demand will benefit the bank’s financials. Also, lower tax rates and easing of stringent regulations are expected to offer some support.
However, dismal mortgage banking performance (as originations continue to decline) remains a major concern. This is expected to hurt revenue growth to some extent in the near-term.
Shares of Altria have outperformed the Zacks Tobacco industry in the last six months (-8.7% vs. -18.8%). Altria has been delivering year-over-year bottom-line growth for quite some time and maintained the upside in second-quarter 2018.
Performance during the quarter was mainly backed by lower outstanding shares and reduced adjusted tax rate. In fact, solid performance in the first half of 2018 propelled management to raise 2018 view. The Zacks analyst thinks Altria has been progressing well with reduced risk products. Pricing also continues to drive the company’s top line.
On the flip side, stern FDA regulations combined with increased health consciousness has been taking a toll on cigarette sales. Notably, cigarette shipment volumes fell 10.8% year over year during second quarter, wherein total cigarette retail share declined 50.2%. Sadly, volumes in this category are expected to remain soft in the forthcoming periods, owing industry-wide headwinds.
Charter Communications’ shares have underperformed the Zacks Cable TV industry over the past year (-21.1% vs. -16.4%). The Zacks analyst thinks Charter is benefiting from subscriber growth in residential and commercial internet and voice segment.
The partnership with Comcast to develop back-end software to support services for Xfinity mobile offering is significantly positive. The collaboration will help in saving costs. Moreover, the launch of Spectrum Mobile service under mobile virtual network operator (MVNO) reseller agreement with Verizon is positive for the company.
However, Charter continues to struggle due to a saturated and competitive multi-channel U.S. video market. The company also faces stiff competition from online TV streaming service providers. The company's high debt level and consolidation-related woes are major headwinds.
Other noteworthy reports we are featuring today include Corning (GLW), Baxter (BAX) and lululemon (LULU).
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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>>>