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Research Daily

Monday, November 12, 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 Altria (MO), American Express (AXP) and U.S. Bancorp (USB). 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 >>>

Altria’s shares have outperformed the Zacks Tobacco industry over the past three months (+7.5% vs. -1.4%). The company has been delivering year-over-year bottom-line growth for quite some time and maintained the upside in third-quarter 2018.

Earnings during the quarter was mainly backed by lower outstanding shares and reduced income tax. Consistent solid performance propelled management to raise 2018 view. The Zacks analyst thinks Altria has been gaining from the rising popularity of Smokeless products. Pricing also continues to drive the company’s revenues in the smokeable and smokeless segments.

On the flip side, stern FDA regulations combined with increased health consciousness has been taking a toll on the cigarette category. Notably, cigarette shipment volumes fell 3.5% year over year during third quarter owing to decline in retail share and unfavorable trade inventory movements. Additionally, the company’s wine category has also been sluggish, thanks to stiff competition.

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

Shares of Buy-ranked American Express are up +15.3% over the past year, outperforming the Zacks Financial Miscellaneous Services industry, which has declined -13.4% over the same period. American Express’s third-quarter earnings per share beat expectations by 5.6% and increased 25.3% year over year. Higher card member spending, loans and fee income aided earnings.

The Zacks analyst thinks a solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments are growth drivers. It continues to witness strong loan growth and credit metrics. Its international business also seems attractive.

However, it faces an increase in reward expenses, led by enhancements of its U.S. platinum products. Cost of card member services has been increasing over the past three years and it continued to elevate this year as well, reflecting higher engagement levels across its premium travel services. It has also been witnessing an increase in the provision of loan losses for the past two and a half years.

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

Buy-ranked U.S. Bancorp’s shares have outperformed the Zacks Major Banks industry over the past six months, gaining +3.8% vs -6.5%. The company possesses an impressive earnings surprise history, beating expectations in all the trailing four quarters.

Third-quarter 2018 earnings reflect higher revenues, along with loan growth and reduced provisions. However, lower mortgage banking revenues and escalating expenses were major drags. The Zacks analyst thinks U.S. Bancorp's prospects will likely get support from its solid business model, core franchise, lower tax rate, rising interest rate and diverse revenue streams.

Also, its organic growth remains solid and will likely benefit from the improving economic scenario. Though escalating expenses due to its ongoing investments in technology and likely increase in legal expenses remain concerns, U.S. Bancorp remains well poised to grow through acquisitions.

(You can read the full research report on U.S. Bancorp here >>>).

Other noteworthy reports we are featuring today include Kraft Heinz (KHC), T-Mobile US (TMUS) and Humana (HUM).

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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>>>

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