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Research Daily

Friday, September 27, 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 Philip Morris (PM), PayPal (PYPL), and Dominion Energy (D). 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 >>>

Philip Morris’ shares have underperformed the Zacks Tobacco industry over the past six months (-19.3% vs. -13.9%). The Zacks analyst thinks the company has been gaining from solid revenues in the reduced risk products (RRPs) category.

The company is making constant efforts to expand in this space. In fact, the top and the bottom lines grew year over year during the second quarter of 2018, courtesy of favorable cigarette pricing and solid RRPs performance, with the latter being bolstered by the success of iQOS. To sustain growth in this category, the company plans to invest close to $600 million in 2018.

Further, the company continues to expect price hikes to aid maintaining margin growth. However, a persistent decline in cigarette volumes, stemming from consumers’ rising health consciousness and stringent government regulations on tobacco products, is a major headwind. These factors, which have been affecting the industry for a while, caused a 1.5% drop in Phillip Morris’ cigarette volumes during second quarter.

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

Shares of PayPal have outperformed the Zacks Internet Software industry over the past year (+40.5% vs. +35.6%). PayPal continues to witness expanding customer base with the help of its robust Venmo, Choice and One Touch. Also, the company’s tie-up with MasterCard is aiding the adoption rate of Venmo.

The company’s ongoing partnership with ShinhanCard remains positive for its presence in South Korea. Also, its extended partnership with Google and eBay will continue to strengthen its customer base further. This will keep adding strength to PayPal’s total payments volume.

The Zacks analyst thinks an expanding product & services portfolio and global presence will continue to benefit the company’s market share. However, exposure to foreign exchange and intensifying competition are major concerns.

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

Buy ranked Dominion Energy’s shares have gained +0.6% over the last three months, outperforming the Zacks Electric Power industry, which has lost -1.2% over the same period. Dominion Energy’s Cove Point Liquefaction project has started operations and is contributing as per expectations. The Zacks analyst thinks Dominion Energy is benefiting from its regulated growth projects and synergies from Questar’s acquisition.

The company’s expansion of electric transmission, natural gas facilities and midstream assets are strong positives. Its merger deal with SCANA received FERC Nod and is going to be immediately accretive to earnings of the company.  However, any delay in ongoing capital projects could adversely impact profitability of the company.

Reduction in solar investment tax credits and share dilution may affect its future results. The company and its gas unit’s dependency upon third-party producers for natural gas supply increases risk.

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

Other noteworthy reports we are featuring today include Texas Instruments (TXN), Marsh & McLennan (MMC) and PPG Industries (PPG).

5 Medical Stocks to Buy Now

Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.

New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.

Click here to see the 5 stocks >>

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>>>

Featured Reports

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High Expenses Hurt Marsh & McLennan (MMC)

Per the Zacks analyst, the company's operating expenses escalated over the last two years due to higher compensation and benefits. A consistent increase in expenses might weigh on margins.