Today's Must Read
Wealth Management Focus, Trading Support Morgan Stanley (MS)
Enbridge's (ENB) C$16B Project Backlog to Offset Debt Load
Thursday, December 6, 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 Adobe (ADBE), Morgan Stanley (MS) and Enbridge (ENB). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-ranked Adobe’s shares have gained +40.3% year to date, outperforming the Zacks Software industry which has increased +20% over the same period. The Zacks analyst thinks Adobe’s creative products are continuing to drive its top-line growth. The company is currently benefiting from strong demand for its innovative solutions and growing subscriptions for its cloud application.
Adobe has been making efforts toward establishing its presence in cloud-related software areas such as documents and marketing. Adobe Experience Manager, which enables brands to offer a personalized experience, is also witnessing robust growth. Adobe’s market position, compelling product lines, continued innovation, solid adoption of Creative Cloud and Adobe marketing cloud is causes for optimism.
Estimates have been stable lately ahead of the company’s Q4 earnings release. The company has a positive record of earnings surprises in recent quarters. However, lower end-market demand and exposure to Europe remain overhangs.
Shares of Buy-ranked Morgan Stanley have lost -10.6% over the past three months, underperforming the Zacks Investment Banking industry, which lost -15% over the same period. Also, the company possesses an impressive earnings surprise history, beating the Zacks Consensus Estimate in each of the trailing four quarters.
The Zacks analyst thinks the company’s efforts to strengthen wealth management business, focus on corporate lending, steady loan growth, higher interest rates and normalized levels of trading activities will further support revenues. While slowdown in debt originations and mounting expenses remain major concerns, enhanced capital deployment activities reflect a strong balance sheet position.
Enbridge’s shares have declined 14.6% over the past year, underperforming the Zacks Oil Production and Pipeline industry’s loss of 10.3% during the same period. Enbridge has the longest and most sophisticated crude and liquids pipeline system in the world, spreading across 17,018 miles.
Notably, the merger with Spectra Energy has made Enbridge the largest energy infrastructure company in North America in terms of enterprise value. The company’s huge backlog of growth projects, which stand at roughly C$16 billion along with C$17.9 billion worth of midstream projects that are online, will help it raise dividend by 10% annually through 2020.
However, the company’s huge debt load is a concern. As of Sep 30, 2018, Enbridge had long-term debt of US$44.9 billion as against cash balance of only $556 million, reflecting balance sheet weakness. The company’s year-over-year higher operating expenses for third-quarter 2018, reflecting a spike in commodity costs is a cause for worry.
Other noteworthy reports we are featuring today include Mastercard (MA), Intuitive Surgical (ISRG) and TOTAL S.A. (TOT).
More Stock News: This Is Bigger than the iPhone!
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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>>>