Today's Must Read
Intel (INTC) Rides on AI-based Alliances & Product Rollouts
High Speed Internet Subscriber Gains Benefit Comcast (CMCSA)
Tuesday, January 29, 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 JPMorgan (JPM), Intel (INTC) and Comcast (CMCSA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
JPMorgan’s shares have outperformed the Zacks Major Regional Banks industry in the past year (-9.7% vs. -14.4%). Also, the company has an impressive earnings surprise history, having surpassed expectations in three of the trailing four quarters.
Its fourth-quarter 2018 results were adversely impacted by weaknesses in trading and underwriting businesses as well as higher costs. These were partially offset by growth in loans and higher advisory fees.
The Zacks analyst thinks expansion into new markets, focus on the card business, higher rates and increasing loan demand will support profitability. Its enhanced capital deployment actions reflect strong liquidity position.
However, dismal mortgage banking performance (owing to lower origination volume) remains a major concern. Its significant dependence on capital markets is cause for concern. These factors are expected to hurt the bank's fee income growth to an extent.
Shares of Intel have outperformed the Zacks General Semiconductor industry in the past year, losing -4.2% vs. a decline of -17.4%. The Zacks analyst thinks Intel is benefiting from robust performance of the Data Center Group, Internet-of-Things Group, Non-Volatile Memory Solutions and Programmable Solutions Group.
These segments form the crux of Intel’s data-centric business model. The company’s strategy of expanding TAM beyond CPU to adjacent product lines like silicon photonics, fabric, network ASICs, and 3D XPoint memory is bearing fruit. Further, expanding customer base in the PSG segment drove top-line growth.
Additionally, lower spending helped in expanding operating margins. However, a declining trend in PC shipments is detrimental to business prospects of Intel, which continues to depend substantially on PC sales. Also, delay in transition to 10-nm process is a concern. Moreover, intensifying competition remains a headwind.
Buy-ranked Comcast’s shares have outperformed the Zacks Cable Television industry in the past year, losing -16.5% vs. -20.1%. Comcast’s fourth-quarter 2018 results benefited from solid growth in the number of residential high-speed Internet customers. Advertising revenues also increased due to higher political advertising.
The Zacks analyst thinks Comcast’s strategy to market broadband-only packages to customers is benefiting top-line growth.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.
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.
Other noteworthy reports we are featuring today include Kinder Morgan (KMI), Air Products (APD) and Discover Financial (DFS).
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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>>>