Today's Must Read
Solid Xfinity Mobile Service Adoption to Aid Comcast (CMCSA)
Solium Deal Aids Morgan Stanley (MS), Debt Originations a Woe
Thursday, June 27, 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 Apple (AAPL), Comcast (CMCSA) and Morgan Stanley (MS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Apple’s shares have outperformed the broader S&P 500 index on a year-to-date basis (+26.6% vs. +14.9%). The Zacks analyst thinks that the recent WWDC event demonstrated the company’s continued focus on boosting the Services business through cutting-edge software.
Apple unveiled a plethora of software updates and also showcased the new Mac Pro and Pro XDR 6K display. The recent acquisition of Drive.ai adds engineering talent that will provide a boost to Apple’s self-driving efforts. Nevertheless, weak iPhone demand, particularly in China and emerging economies, is a headwind. Moreover, the ongoing U.S.-China trade war doesn’t bode well for the company.
Further, legal woes have increased due to lawsuit from customers related to App Store charges. The company has also been accused of unfair practices by Spotify. These are significant headwinds for investors, at least in the near term.
Shares of Outperform-rated Comcast have outperformed the Zacks Cable Television industry in the past year, gaining +29% vs. +21.6%. The Zacks analyst thinks Comcast is benefiting from solid growth in the number of residential high-speed Internet customers.
Further, expanding Wi-Fi coverage and innovative xFi control features are improving customer experience. Moreover, the company’s Xfinity Mobile is now used by more than one million customers. The company’s recent plan to sell Apple Watch 4 and iPads with LTE to Xfinity Mobile customers is expected to drive its user base.
Additionally, the Sky acquisition has expanded Comcast’s international reach. Sky’s content strength is a major growth driver. Meanwhile, estimates have been going up ahead of the company’s second-quarter earnings release. The company has recorded positive earnings surprises in last few quarters.
Morgan Stanley’s shares have gained +9.2% over the past six months, outperforming the Zacks Investment Banking industry, which has increased +6% over the same period. The company has an impressive earnings surprise history, having surpassed expectations in three of the trailing four quarters.
The Zacks analyst thinks the acquisition of Solium Capital is in sync with the company’s efforts to further strengthen its wealth management business. Its focus on its corporate lending unit, steady loan growth, higher interest rates and normalized levels of trading activities will likely aid revenue growth. Further, its steady capital deployment activities indicate a strong balance sheet position (indicated by stress test clearance).
However, slowdown in debt originations will likely hinder underwriting fee income growth and hurt the company’s investment banking performance. Further, elevated operating expenses are likely to hurt profits.
Other noteworthy reports we are featuring today include ConocoPhillips (COP), Micron (MU) and Ford (F).
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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>>>