Today's Must Read
Subscriber Gain Aids Charter (CHTR) Amid Stiff Competition
Lowe's (LOW) Omnichannel and Pro Customer to Lift Sales
Thursday, December 26, 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 Texas Instruments (TXN), Charter Communications (CHTR) and Lowe's (LOW). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Texas Instruments’ shares have underperformed the Zacks General Semiconductor industry year to date (+36.1% vs. +42.3%). The Zacks analyst believes that Texas Instruments is being impacted by sluggish performance of Analog and Embedded Processing segments. Weakening end-market conditions and U.S.-China trade tensions are also overhangs.
Further, weak customer momentum continues to impact the company’s performance in communications equipment market. The stock has underperformed the industry on a year-to-date basis. Nevertheless, Texas Instruments remains confident about efficient manufacturing strategies, strong research and development activities.
Further, increasing investments in the automotive and industrial markets are anticipated to yield good returns for the company. However, high debt level and rising competitive pressure in the auto chip space are headwinds.
Shares of Charter Communications have gained +18.3% in the past three months against the Zacks Cable TV industry’s rise of +6%. The Zacks analyst believes that the company is benefiting from growth in Internet, mobile, commercial and video revenues.
Increase in Internet speed at no extra cost is also aiding subscriber growth. Additionally, Charter’s spectrum mobile products are gaining traction and subscriber base is increasing rapidly. Launch of spectrum mobile services to small and medium business customers is a key catalyst. Improving free cash flow is a growth driver.
However, commercial revenues continued to suffer due to migration of customers to Spectrum pricing, and packaging from Legacy TWC and Legacy Bright House. Further, Charter persistently loses video subscribers, primarily due to cord-cutting and intense competition from streaming service providers like Netflix and Amazon.
Lowe's shares have gained +20.6% over the past six months against the Zacks Building Products - Retail industry's rise of +10.3%. The Zacks analyst believes that the stock received a boost when it reported third-quarter fiscal 2019 results, wherein earnings grew year over year and beat the Zacks Consensus Estimate.
Moreover, comps in the quarter increased, driven by solid performance in its U.S. home improvement stores. Strong macroeconomic landscape along with constant efforts to enhance customers’ experience, solid performance of the merchandise category and strength in the Pro business also bode well. Further, efforts to enhance online business led to robust comps growth in lowes.com.
Encouragingly, management raised adjusted earnings guidance for fiscal 2019. However, high level of debt for the past few quarters may act as a deterrent. Also, the company is exposed to competition.
Other noteworthy reports we are featuring today include Caterpillar (CAT), BlackRock (BLK) and Zoetis (ZTS).
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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>>>