Today's Must Read
Cost Control Aids Wells Fargo (WFC) Amid Originations Woes
CME Group (CME) Futures Expansion Aids, Expenses Hurt
Thursday, March 17, 2022
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Exxon Mobil Corporation (XOM), Wells Fargo & Company (WFC) and CME Group Inc. (CME). 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 Exxon Mobil have outperformed the Zacks Oil and Gas - Integrated - International industry over the past year (+29.6% vs. +27.1%). The Zacks analyst believes that ExxonMobil's bellwether status and an optimal integrated capital structure that has historically produced industry-leading returns make it a relatively lower-risk energy sector play. Recently, the company made two new oil discoveries in the Stabroek Block, which will add to its 10 billion oil-equivalent barrels of recoverable resources. It also has a strong presence in the prolific Permian Basin, where it continues to lower its fracking & drilling costs.
In order to capitalize on mounting demand for clean energy, ExxonMobil is making efforts to create more efficient fuels while reducing emissions. The company increased its quarterly dividend to 88 cents per share. Also, it has significantly lower exposure to debt as compared to other integrated majors.
Shares of Wells Fargo have outperformed the Zacks Banks - Major Regional industry over the past year (+29.6% vs. +3.1%). The Zacks analyst believes that the growing deposit balance, driven by encouraging economic trends, strengthens the company's liquidity position. Given its robust capital position, the company’s capital-deployment activities seem sustainable. Improving credit quality poses a tailwind. Also, progress on efficiency initiatives propelled expense control and savings. This is expected to aid Well Fargo's bottom line continuously.
Yet, legal hassles exacerbated with Wells Fargo being penalized with business restrictions and a monetary fine. Restrictions on asset growth limit loan expansion ability. A decline in originations might limit mortgage banking income.
Shares of CME Group have outperformed the Zacks Securities and Exchanges industry over the past year (+17.2% vs. +11.1%). The Zacks analyst believes that CME Group’s strong market position driven by varied derivative product lines bodes well. Efforts to expand and cross sell through strategic alliances, acquisitions, new product initiatives and a stable global presence bode well. Product innovation and growing proportion of volume from customers outside the United States have been aiding results. The company intends to focus more on over-the-counter clearing services
However, escalating expenses due to higher technology cost are likely to put pressure on the company's margin expansion. Diversified product portfolio is significantly exposed to volatile interest rate, firm government regulations and limited credit availability in unstable capital and credit market. Also, stiff competition poses financial risk for the company.
Other noteworthy reports we are featuring today include JPMorgan Chase & Co. (JPM), Occidental Petroleum Corporation (OXY) and AmerisourceBergen Corporation (ABC).
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>>>