Today's Must Read
Strong Slate of Movies, Disney+ Adoption to Aid Disney (DIS)
Restructuring Efforts Aid Morgan Stanley (MS), Costs a Woe
Thursday, December 12, 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 Alibaba Group (BABA), Disney (DIS) and Morgan Stanley (MS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Alibaba’s shares have outperformed the Zacks Internet Commerce industry year to date (8.2% vs. 8.1%). The Zacks analyst believes that the company’s increasing investments, uncertain economy and macro headwinds in China are major concerns. Also, rising competition poses a risk.
Alibaba reported strong fiscal second-quarter earnings driven by steady improvement in core commerce and solid growth in metrics. Further, Alibaba’s strengthening cloud business with its expanding customer base drove its performance. Notably, the New Retail strategy has gained momentum in the markets served by the company. This aided growth in Tmall Import and Hema fresh food grocery businesses.
Shares of Disney have gained 7% in the past three months against the Zacks Media Conglomerates industry’s rise of 6.1%. The Zacks analyst believes that Disney is expected to benefit from its solid slate of theatrical releases in the near term.
Disney reported impressive fourth-quarter fiscal 2019 results, driven by a solid top-line performance in the Studio Entertainment and DTC businesses. However, higher operating losses in the DTC segment and Media Networks’ operating income decline hurt profitability.
Moreover, Disney+ has gained more than 10 million subscribers within 24 hours of its launch, making it a key catalyst for the company’s prospects. However, the company anticipates higher operating losses in the DTC & International segment due to the ongoing investments. Moreover, increasing operating expenses related to domestic parks and resorts are expected to negatively impact profitability.
Morgan Stanley's shares have gained 15.1% over the past six months against the Zacks Investment Banking industry's rise of 10.2%. The Zacks analyst believes that the acquisition of Solium Capital is in sync with the company’s efforts to further strengthen its wealth management business.
The company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Moreover, steady loan growth, strong balance sheet position and the company's continued focus on its corporate lending business are expected to continue to aid profitability.
However, weaknesses in investment banking and trading are expected to hinder fee income growth to some extent and hurt the company’s top line. Given the decline in interest rates and a tough operating backdrop, the company’s performance is expected to remain sluggish in the near term.
Other noteworthy reports we are featuring today include Enbridge (ENB), Zoetis (ZTS) and Honda Motor (HMC).
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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>>>