Today's Must Read
Royal Dutch Shell (RDS.A) to Gain from Growing LNG Demand
Goldman (GS) Exhibits Cost Control; Legal Issues Linger
Tuesday, June 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 Caterpillar (CAT), Royal Dutch Shell (RDS.A) andGoldman Sachs (GS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Caterpillar’s shares have outperformed the Zacks Construction and Mining industry (+7.7% vs. +7.6%) over the past six months. The Zacks analyst thinks that continued strength in its end markets, robust backlog and focus on cost control is likely to drive results.
For the Construction Industries segment, improvement in residential and non-residential construction in North America, and infrastructure demand is likely to aid revenues. Global economic momentum and increasing commodity prices is restoring miners’ profitability and they are resuming capital spending which bodes well for the Resource Industries segment. Investments in expanded offerings and services, and digital initiatives like e-commerce will also fuel growth.
Shares of Royal Dutch Shell have outperformed the Zacks Integrated Oil industry in the year to date period, gaining +13.0% vs +9.2%. The Zacks analyst thinks Royal Dutch Shell’s upstream unit profit has rebounded strongly over the past few quarters, while the integrated gas business — consisting of BG Group activities — impressed on the back of pricing gains.
Notably, the Anglo-Dutch company's position as a key supplier of liquefied natural gas should benefit its long-term cash flow growth on the back of attractive growth opportunities. However, there are apprehensions that Royal Dutch Shell's disposal program could affect crude production, which was down 2% year over year in 2018.
Goldman Sachs’ shares have gained 3.6% in the last three months, outperforming the Zacks Financial - Investment Bank industry, which has lost -1.7% over the same period. The Zacks analyst believes Goldman’s well-diversified business and focus to capitalize on growth opportunities through strategic moves will continue to strengthen the overall business.
Additionally, cost-control efforts are commendable. Notably, the bank has announced a deal to acquire United Capital Financial Partners, a boutique wealth-management firm.
Recently, the bank has cleared the 2019 stress test and awaits capital plan approval. However, Goldman has been embroiled in the scandal related to the multibillion-dollar 1Malaysia Development Bhd (1MDB), which is a major concern.
Other noteworthy reports we are featuring today include Newmont Mining (NEM), Barrick Gold (GOLD) and Centene Corporation (CNC).
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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>>>