Today's Must Read
High Speed Internet Subscriber Gains Benefit Comcast (CMCSA)
ConocoPhillips (COP) Banks on Bakken, Production Costs High
Tuesday, January 15, 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 Walmart (WMT), Comcast (CMCSA) and ConocoPhillips (COP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Walmart’s shares have performed nearly in line with the Zacks Supermarkets industry over the past six months (+8.4% vs. +8.1%), due to its focus on strengthening e-commerce and store operations. These factors helped the company retain its sturdy comps trend in third-quarter fiscal 2019, wherein top and bottom lines improved year over year and the latter marked its third consecutive beat.
Notably, U.S. comps rose for the 17th straight time. Further, e-commerce sales surged, courtesy of strong Walmart.com and online grocery performances. These factors encouraged management to raise view. The Zacks analyst likes Walmart’s efforts to improve its International unit by shifting focus to profitable countries.
However, the company’s investment in Flipkart is expected to dent the bottom line. Such investment costs and a compelling pricing strategy have been hurting Walmart’s gross margin for a while. Nevertheless, the Flipkart deal bodes well for the long term and should help the company stand firm against Amazon.
Shares of Comcast have outperformed the Zacks Cable Television industry over the past year, losing -14.5% vs. -18.3%. The Zacks analyst thinks Comcast is benefiting from solid growth in residential high-speed Internet customers.
Advertising revenues are also expected to grow due to higher spending on political advertising. Comcast’s strategy to market broadband-only packages to customers is likely to drive top-line growth. Further, expanding Wi-Fi coverage along with innovative xFi control features is improving customer experience.
Moreover, the company’s Xfinity Mobile is now used by more than one million customers. Further, the Sky acquisition expands Comcast’s international reach. Sky’s content portfolio strength is a major growth driver.
Additionally, NBCUniversal’s upcoming streaming service is a key catalyst. However, the company continues to lose voice and video subscribers due to cord-cutting and stiff competition. Additionally, high debt level is a headwind.
ConocoPhillips’ shares are up +11.5% over the past year, outperforming the Zacks U.S. Integrated Oil industry, which has lost -9.2% over the same period. In terms of production and proved reserves, ConocoPhillips is the largest oil and gas exploration and production (E&P) player in the world.
Notably, there are significant opportunities for the upstream energy player in the Eagle Ford where it owns about 3,400 undrilled locations. The Zacks analyst thinks strong focus on two other prospective resources like Delaware basin and Bakken shale is likely to help ConocoPhillips achieve its target of more than 25% CAGR of production through 2017 to 2019.
However, rising production and operating costs are hurting the company’s bottom line. Since a majority of ConocoPhillips’ production comprises oil, the weak crude pricing scenario could hurt the company’s operations.
Other noteworthy reports we are featuring today include PayPal (PYPL), CME Group (CME) and CSX Corporation (CSX).
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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>>>