Today's Must Read
Higher Rates, Loans Support JPMorgan (JPM), Fee Income a Woe
Verizon (VZ) Rides on Faster 5G Rollout, Core Network Focus
Tuesday, June 28, 2022
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 Visa Inc. (V), JPMorgan Chase & Co. (JPM), and Verizon Communications Inc. (VZ). 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 >>>
Visa shares have held up better than Mastercard (MA) and the Zacks Financial Transaction Services industry (V down -8% vs. MA down -10.1% vs. the industry down -11.1%). The company is faced with a number of challenges like exposure to the Russia-Ukraine situation, high operating expenses and moderating cash volume from the Asia Pacific region, but the company continues to benefit from numerous buyouts and alliances.
The company's investments in technology are solidifying its position in the payments market. A shift in payments to the digital mode is a boon. The coronavirus vaccine rollouts and the gradual revival of consumer confidence will keep driving spending, expanding business volumes in turn. Backed by its strong cash position, it remains committed to boost its shareholder value. Its balance sheet strength is commendable. Visa's stock has shed less value than its industry in a year.
JPMorgan Chase shares have declined -20.9% over the past year against Zacks Banks - Major Regional industry’s decline of -16.6%. The volatile nature of the trading business is likely to make fee income growth challenging. Further, rising mortgage rates will likely hurt originations and refinancing activities. Steadily rising operating expenses remain a key near-term headwind.
However, higher interest rates and rising loan demand are expected to positively impact on the company’s margins and net interest income. Opening new branches, strategic acquisitions/investments, global expansion and digitization initiatives, and decent investment banking (IB) pipeline are likely to keep aiding the company's top line. Also, its steady capital deployments look sustainable and will enhance shareholder value.
Verizon shares have declined -3.9% over the past year against Zacks Wireless National industry’s decline of -4.8%. The company offered a muted outlook for 2022 due to the challenging macroeconomic environment. An intensely competitive market and hefty expenses on promotions and lucrative discounts to attract customers are likely to hurt its profitability. High auctioning expenses for the mid-band spectrum are expected to further compromise margins.
However, Verizon plans to accelerate the availability of its 5G Ultra Wideband network with C-Band deployment, covering 175 million people by the end of 2022. Its growth strategy includes 5G mobility, nationwide broadband and mobile edge compute and business solutions. Verizon is building the entire network infrastructure to provide the most amazing 5G experience to customers. It is offering various mix-and-match pricing in both wireless and home broadband plans that has led to solid customer additions.
Other noteworthy reports we are featuring today include Wells Fargo & Company (WFC), Marsh & McLennan Companies, Inc. (MMC), and Seagen Inc. (SGEN).
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>>>