Today's Must Read
Order Flows to Aid Lockheed (LMT) Amid Rising Interest Expenses
Investments & Strong Economic Conditions Aid NextEra (NEE)
Wednesday, January 30, 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 United Technologies (UTX), Lockheed Martin (LMT) and NextEra Energy (NEE). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-ranked United Technologies’ shares have lost 5.1% over the past three months, underperforming the Zacks Diversified Operations industry, which has declined 1.8% over the same period. However, United Technologies' fourth-quarter 2018 earnings and revenues surpassed expectations by a wide margin.
The Zacks analyst thinks strength in commercial and military aftermarket businesses and impressive contribution from its acquired Rockwell Collins business sales will likely continue to boost United Technologies' near-term revenues. Also, improved revenues and cost-cutting measures are expected to enhance profitability, going forward.
Backed by these positives, the company has given bullish full-year 2019 revenue guidance. Further, the Rockwell Collins buyout is likely to boost sales in 2019. Moreover, separation of the company's existing business will create higher values and customer satisfaction.
Shares of Lockheed Martin have lost 17.7% in the past year, underperforming the Zacks Aerospace Defense sector, which has declined 8.8% over the same period. Lockheed Martin ended 2018 on a mixed note. While the company’s fourth quarter earnings came in line with the Zacks Consensus Estimate, revenues surpassed the consensus mark. Year over year results were impressive.
The Zacks analyst thinks that being the largest defense contractor in the world, Lockheed enjoys strong demand for its high-end military equipment in domestic and international markets. Consequently, strong order growth has been a primary growth driver for this company. The F-35 program continues to be a primary growth driver for the company.
However, it faces intense competition for its broad portfolio of products and services in both domestic and international markets. It remains subject to interest rate risk related to the issuance of debt. With current U.S. economic conditions favoring higher rates, the credit market may not be favorable for Lockheed Martin.
Buy-ranked NextEra Energy’s shares have outperformed the Zacks Electric Power industry in the past year, gaining 9.1% vs 3.4%. However, NextEra Energy’s fourth-quarter earnings and total revenues missed expectations. But strong execution of operational and financial plans allowed NextEra Energy to report solid year-over-year results.
The Zacks analyst thinks investments to strengthen its infrastructure and ongoing capital projects, on completion, will help in serving the expanding customer base more efficiently. The expansion of business through strategic acquisitions positively impacted earnings.
The company’s nature of business is subject to complex and comprehensive federal, state and other regulations. Substantial investments are undertaken to ensure the safety of nuclear operations. That said, the risk of unplanned outages remains, which could derail its normal operations and impact profitability.
Other noteworthy reports we are featuring today include NVIDIA (NVDA), Goldman Sachs (GS) and Intuitive Surgical (ISRG).
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
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>>>