Today's Must Read
AT&T (T) Aims to Steer High Riding on 3-Year Financial Plan
Investment & Innovation Mirror Coca-Cola's (KO) Core Strength
Friday, November 1, 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 Visa (V), AT&T (T) and Coca-Cola (KO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Visa’s shares have underperformed the Zacks Financial Transaction Services industry year to date (35.6% vs. 38.6%). The Zacks analyst believes that numerous acquisitions and alliances plus technology upgrades and effective marketing have paved the way for long-term growth and consistent increase in revenues.
Visa’s earnings of $1.47 per share beat the Zacks Consensus Estimate by 2.8% and improved 21% year over year, driven by growth in payments volume, cross-border volume and processed transactions.
Notably, the acquisition of Visa Europe is a long-term growth strategy for the company. Its international business has been expanding and adds diversification benefits. Its strong capital position is another positive.
However, high client incentives and expenses weigh on its operating margin. Also, adverse foreign exchange volatility imparts instability to the company’s earnings.
Shares of AT&T have gained 25.7% in the past six months against the Zacks Wireless National industry’s rise of 14.2%. The Zacks analyst believes that the company’s three-year financial framework is expected to drive significant improvement in margins and bottom-line growth with sustained investments and debt reduction.
It aims to deploy a standards-based, nationwide mobile 5G network in early 2020. AT&T’s 5G Evolution technology is live in more than 200 markets, and is expected to reach more than 400 markets by the end of 2019.
However, AT&T is witnessing a persistent decline in linear TV subscribers and legacy services. Its wireline division is facing loss in access line due to competitive pressure from VoIP service providers. As the company tries to woo customers with discounts, freebies and cash credits, margin pressures tend to soar.
Coca-Cola’s shares have gained 4.4% over the past three months against the Zacks Soft Drinks Beverages industry’s rise of 2.2%. The Zacks analyst believes that the company’s focus on consumer-centric innovation, solid core brand performance and improved execution in the marketplace is aiding performance.
These also bolstered its quarterly performances as evident from its ninth straight sales beat in third-quarter 2019. While earnings were in line with estimates in the quarter, the company still registered positive earnings surprise in eight of the last 10 quarters. Additionally, revenues improved year over year on strength across all segments as well as growth in volume and price/mix.
Innovation and investment in core categories and brands have been the key focus area, which led to the expansion of retail value share. However, it expects adverse currency rates to significantly mar results in 2019 and beyond.
Other noteworthy reports we are featuring today include salesforce.com (CRM), American Express (AXP) and Lowe's (LOW).
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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>>>