Today's Must Read
New Branches, Loan Growth Aid BofA (BAC), Lower Rates a Woe
High Speed Internet Subscriber Gain Benefits Comcast (CMCSA)
Thursday, December 19, 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), Bank of America (BAC) and Comcast (CMCSA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amazon’s shares have underperformed the S&P 500 year to date (+18.8% vs. +26%). The Zacks analyst believes that Amazon is benefiting from its aggressive retail strategies, distribution strength and robust Prime program.
Rapid adoption of Prime driven by customer benefits and strengthening grocery services is aiding its top line. Also, expanding content portfolio is encouraging Prime membership. Further, strengthening AWS services and its growing adoption rate are aiding Amazon’s dominance in the cloud space. Furthermore, improving Alexa skills and features remain major positives.
Also, rising number of Alexa compatible devices is a tailwind. However, rising transportation cost related to its free one-day shipping service remains an overhang and is likely to increase further. Also, Amazon expects foreign exchange headwinds to continue impacting its top line.
Shares of Bank of America have gained +18.7% in the past three months against the Zacks Major Regional Banks industry’s rise of +6.9%. The Zacks analyst believes that opening branches in new regions, improved digital offerings, decent loan growth and efforts to control costs will aid profitability despite the Fed’s accommodative monetary policy stance.
Bank of America's shares have outperformed the industry over the past year. The bank's earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters. Also, efforts to focus more on consumer banking business have started bearing fruits. The company's enhanced capital deployment actions reflect a strong balance sheet position.
However, dismal performance of capital markets continues to hurt the company’s investment banking and trading businesses, which in turn will hamper fee income growth. Litigation issues related to its business misconducts in the pre-crisis period are likely to lead to higher legal costs.
Comcast's shares have lost -1.1% over the past six months against the Zacks Cable Television industry's rise of +8%. The Zacks analyst believes that Comcast is benefiting from solid growth in a number of residential and business services high-speed Internet customers.
The company’s strategy of providing high-speed Internet at an affordable cost plays a key role in improving customer experience. Growing popularity of Xfinity products is also a key catalyst. Moreover, expansion in the wireless user base and the security and automation services customer base is a growth driver.
Additionally, Sky’s content strength is expected to drive the subscriber base in Europe. Further, increasing digital video sales hold promise. However, Comcast continues to lose video subscribers due to cord cutting. Moreover, a high debt level is a headwind.
Other noteworthy reports we are featuring today include Netflix (NFLX), IBM (IBM) and Altria Group (MO).
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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>>>