Today's Must Read
Strategic Mergers Aid Boeing (BA), Low 737 Deliveries Hurt
Micron (MU) Rides on Recovery in DRAM Demand Amid Trade Woes
Wednesday, October 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.com, Inc. (AMZN), The Boeing Company (BA) and Micron Technology, Inc. (MU). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amazon’s shares have underperformed the Zacks Internet - Commerce industry on a year to date basis (+17.7% vs. +18.9%). The Zacks analyst believes that rising transportation cost related to its free one-day shipping service remains an overhang and is likely to escalate further. Amazon also expects foreign exchange headwinds to continue impacting the top line.
However, the company did benefit from solid Prime momentum owing to robust grocery services and strong content portfolio. Moreover, Prime Free One Day service helped Amazon in gaining traction across customers. Improving Alexa skills and features remain a major positive, while expanding smart home products offerings remain tailwinds.
Boeing’s shares have underperformed the Zacks Aerospace - Defense industry so far this year (+8.0% vs. +21.3%). The Zacks analyst believes that Boeing’s commercial business has suffering due to lower 737 deliveries, following 737 Max product line's grounding and subsequent costs associated with it. Consequently, its revenues, earnings and cash flow position were affected significantly.
However, Boeing still 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 its commercial business significantly.
Micron’s shares have underperformed the Zacks Semiconductor Memory industry on a year to date basis (+50.6% vs. +51.6%). The Zacks analyst believes that higher mix of NAND, which has lower gross margin, falling memory prices and a slow decline in manufacturing cost, is likely to keep Micron’s margins under pressure.
But, Micron is still well-poised to benefit from the resurgence in DRAM demand, backed by a progress in customer inventory adjustments in the cloud, graphics and the PC markets. Moreover, its focus on increasing the mix of high-value solutions in its portfolio is a boon.
Other noteworthy reports we are featuring today include National Oilwell Varco, Inc. (NOV), Cooper Tire & Rubber Company (CTB) and Kohl's Corporation (KSS).
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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>>>