Today's Must Read
Strong Aerospace Segment Drives Honeywell's (HON) Revenues
Kraft Heinz's (KHC) Savings Plans Likely to Offset Cost Woes
Friday, January 25, 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 PayPal (PYPL), Honeywell (HON) and Kraft Heinz (KHC). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
PayPal’s shares have outperformed the Zacks Internet Software industry in the past year (+7.9% vs. +4.3%). The Zacks analyst thinks PayPal’s portfolio strength remains its key growth driver. Venmo’s improving monetization efforts and its increasing adoption rate across various platforms are aiding the company’s user base.
A rising number of merchants using One Touch and growing availability of Choice are major positives. However, intensifying competition from major players in the finance and payment industry poses a risk to the company’s market position.
PayPal continues to suffer from foreign exchange fluctuations and interest rate risks. Further, the antitrust issues in the U.K. regarding the company’s acquisition of iZettle remain major concerns. Additionally, sale of the company’s U.S. consumer credit receivables portfolio to Synchrony is expected to continue impacting its top-line growth.
Shares of Honeywell have outperformed the Zacks Diversified Operations industry in the past six months, losing -11.3% vs. a -14% decline. The company reported better-than-expected second-quarter 2018 results. The company's top-line performance improved 6%, year over year, organically.
Honeywell believes sturdier demand for its innovative technology solutions will continue to drive the company's segmental revenues in the quarters ahead. The Zacks analyst thinks stronger sales volumes, increased productivity and ongoing commercial effectiveness actions will like drive near-term profitability.
The company is currently facing inflationary headwinds across its entire supply-chain process. Inflation in logistics, transportation and in certain material prices might continue to weigh over Honeywell's profitability in the upcoming quarters.
Kraft Heinz’s shares have declined -14.9% over the past three months, underperforming the Zacks Diversified Food industry which is down -7.1% over the same period. The Zacks analyst thinks Kraft Heinz has been benefitting from improved volume/mix in almost all segments and consumption growth in the United States.
The company has solid innovation initiatives planned in the foodservice space to fuel growth across all regions. It is also making innovation efforts in its growing e-commerce channel. Its well-designed saving and productivity efforts are other positives. This is mainly attributable to continued softness in the Canada region, stemming from product discontinuations and higher promotional expenses.
Sales in this region have been falling year over year for three straight quarters now. Moreover, escalating overhead and input costs has been a deterrent to the company’s performance. In fact, such costs more than offset growth in organic sales while also impacting overall profitability in the third quarter.
Other noteworthy reports we are featuring today include TD Ameritrade (AMTD), Canadian Pacific (CP) and Xilinx (XLNX).
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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>>>