Today's Must Read
Commercial Jet Outlook to Aid Boeing (BA) Amid 737 Woes
Investment in Infrastructure and Renewables Aid NextEra (NEE)
Tuesday, July 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 Amazon (AMZN), Boeing (BA) and NextEra (NEE). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Outperform-rated Amazon’s shares have outperformed the broader market year to date (the stock is up +27.3% vs. the +19.1% increase for the S&P 500 as a whole). Amazon reported mixed second quarter results wherein earnings missed estimates but revenues outpaced the same.
However, the company exhibited year over year growth on both counts. Amazon benefited from its solid Prime momentum owing to robust grocery services and strong content portfolio. Also, Prime Free One Day service helped Amazon in gaining traction across the customers. Further, strengthening AWS services and its growing adoption rate contributed well.
The Zacks analyst thinks improving Alexa skills and features remain a major positive. However, rising transportation costs related to its free one-day shipping service remain an overhang and are likely to increase further. Also, Amazon expects foreign exchange headwinds to continue impacting its top line.
Shares of Boeing have gained +5.5% year to date, underperforming the Zacks Aerospace & Defense industry, which has increased +22% during the same time period. Boeing ended the second quarter of 2019 on a dismal note. The company incurred a huge loss in the quarter. Also, the top line missed expectations and declined year over year.
However, the Zacks analyst stresses that Boeing remains the largest aircraft manufacturer globally in terms of revenues, orders and deliveries and one of the major aerospace and defense contractors. Its proposed joint venture with Embraer is expected to strengthen Boeing’s commercial business significantly.
Its commercial business suffered a major setback due to lower 737 deliveries, following the 737 Max product line's grounding and subsequent costs associated with this development. Consequently, its revenues, earnings and cash flow position were affected significantly.
NextEra’s shares have outperformed the Zacks Electric Power industry in the past year, gaining +26.2% vs +10.5%. The company’s second-quarter performance was better than expected, courtesy of strong progress across all its businesses. The Zacks analyst thinks NextEra’s investments aimed at driving renewable operations through the “30 by 30” plan will help meet its goal to make its generation portfolio cleaner.
Focus on expanding operations in natural gas pipelines and further widening of its business via acquisitions and organic growth will enable the company to achieve its long-term earnings growth target. However, the nature of its business is subject to complex and comprehensive federal, state and other regulations.
If planned nuclear plant outages last longer than expected or unplanned outages take place, normal operations and profitability might be hindered.
Other noteworthy reports we are featuring today include Schwab (SCHW), ServiceNow (NOW) and Fiserv (FISV).
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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>>>