Today's Must Read
Rising Loans, Rates Aid Wells Fargo (WFC), Legal Issues Ail
Productivity Savings to Continue Fueling Mondelez (MDLZ)
Thursday, January 17, 2019
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 NextEra Energy, Inc. (NEE), Wells Fargo & Company (WFC) and Mondelez International, Inc. (MDLZ). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
NextEra Energy’s shares outperformed the Zacks Utility - Electric Power industry in the past twelve months, gaining +15.9% vs +3.6%. The Zacks analyst thinks that NextEra Energy’s investments to strengthen its infrastructure and ongoing capital projects, on completion, will help serve its expanding customer base more efficiently. The expansion of its natural gas operation through strategic acquisitions also will have a positive impact on earnings.
However, the company’s nature of business is subject to complex and comprehensive federal, state and other regulations. At the same time, the risk of unplanned outages remains, which could derail its normal operation and impact profitability.
Shares of Wells Fargo & Company have underperformed the Zacks Banks - Major Regional industry over the past six months (down -13.5% vs. -10.1%). The Zacks analyst thinks that this can be attributed to the company’s fall in non-interest income. Lest we forget that Wells Fargo was slapped with several sanctions, including a cap on the assets by the Federal Reserve, following its involvement in several legal issues. Its reputation harmed by such involvement, might take some time to recover.
But its earnings surprise history is decent and has beaten the Zacks Consensus Estimate in two of the trailing four quarters. Ongoing investment in the businesses to enhance compliance and risk management capability, build a better bank and strengthen core infrastructure, also bode well.
Mondelez International’s shares outperformed the Zacks Food - Miscellaneous industry in the past three months, gaining +3.9% vs -7.9%. The Zacks analyst thinks that the company has been gaining from a strong earnings history. Its third-quarter 2018 bottom-line performance was boosted by benefits from taxes, fewer outstanding shares and operating gains. Further, Mondelez is gaining from improved pricing and productivity savings.
Nevertheless, we note that sluggish sales in North America, stemming from operational challenges, have been a drag on performance. This combined with adverse currency impacts continue to remain as threats.
Other noteworthy reports we are featuring today include L3 Technologies, Inc. (LLL), The Williams Companies, Inc. (WMB) and EOG Resources, Inc. (EOG).
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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>>>