Today's Must Read
Solid Investments, Cash Flow to Boost TOTAL's (TOT) Growth
BD Medical Drives Becton, Dickinson (BDX) Amid Forex Woes
Tuesday, December 24, 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 Royal Dutch Shell (RDS.A), TOTAL (TOT) and Becton, Dickinson (BDX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Royal Dutch Shell’s shares have outperformed the Zacks International Integrated Oil industry year to date (+0.9% vs. -0.5%). The Zacks analyst believes that the Anglo-Dutch company's position as a key supplier of liquefied natural gas should further benefit its long-term cash flow growth on the back of attractive growth opportunities.
Europe's largest oil company’s Q3 earnings was ahead of analysts' expectations, driven by strong performance from the Downstream and Integrated Gas units.
Moreover, its dividend is safe and secure. However, there are worries over drop in its cash flow excluding working capital while the company’s poor reserve replacement ratio raises concerns about future production. Moreover, Shell’s $1.7-$2.3 billion impairment charge is expected to increase gearing. Hence, investors are advised to wait for a better entry point.
Shares of TOTAL have gained +8.3% in the past three months against the Zacks Integrated International Oil industry’s rise of +0.7%. The Zacks analyst believes that the company continues to benefit on account of strong contribution from startups and the expanding upstream portfolio that has above industry-average exposure to the faster-growing hydrocarbon producing regions of the world.
Strategic acquisitions and divestment of assets that are not in sync with its long-term objectives are going to boost performance and further strengthen the company’s cash flow generation capability. Cost-saving initiatives are also aiding it to boost margins.
However, TOTAL's operations in some politically-troubled regions and increasing competition might affect profitability. Due to its global presence, the company is exposed to risks associated with pursuing business abroad.
Becton, Dickinson's shares have gained 10.2% over the past six months against the Zacks Dental Supplies industry's decline of -10.5%. The Zacks analyst believes that solid performance by the core BD Medical and Interventional segments instills optimism in the stock.
Domestic revenues increased year over year in recent times, driven by segmental strength. Growth in Europe and APAC is an added positive. Expansion in gross margin is also encouraging. BD has issued a solid guidance for fiscal 2020, which is indicative of bright prospects.
A series of product launches is expected to boost the stock further. On the flip side, a drop in operating margin raises concern. Management expects unfavorable foreign currency to partially mar BD’s bottom line in fiscal 2020 and first-quarter fiscal results. Competition in the MedTech space is stiff. The stock is overvalued at the moment.
Other noteworthy reports we are featuring today include Kinder Morgan (KMI), Workday (WDAY) and TransDigm Group (TDG).
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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>>>