Today's Must Read
AT&T (T) Rides on 5G Deployment, Sound Capital Allocation
Strong Slate of Movies, Disney+ Adoption to Aid Disney (DIS)
Monday, January 6, 2020
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 Exxon Mobil (XOM), AT&T (T) and Disney (DIS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Exxon Mobil’s shares have outperformed the Zacks Integrated International Oil industry over the past year (-1.7% vs. -2.8%). The Zacks analyst believes that ExxonMobil’s bellwether status in the energy space and optimal integrated capital structure have helped it come up with industry-leading returns.
Moreover, the management’s track record of capex discipline across the commodity price cycle make it a relatively lower-risk energy sector play. The company owns some of the most prolific upstream assets globally, with a number of major projects slated to come online over the next few years.
Notably, ExxonMobil has made 15 oil discoveries in offshore Guyana. The firm estimates 750,000 barrels of oil production per day from the region by 2025.
However, the integrated energy player’s downstream & chemical units significantly underperformed in the first nine months of 2019. The units are unlikely to have recovered in the fourth quarter owing to scheduled maintenance activities.
Shares of AT&T have gained +3.7% in the past three months against the Zacks Wireless National industry's rise of +1.5%. The Zacks analyst believes that the company’s three-year financial framework, which 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, which is expected to increase significantly in the near future.
The company anticipates gaining a competitive edge over rivals through edge computing services and healthy dividend payout. However, AT&T is witnessing a steady 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.
Disney's shares have gained +3.9% over the past six months against the Zacks Media Conglomerates industry's rise of +4.5%. The Zacks analyst believes that Disney is expected to benefit from its solid slate of theatrical releases in fiscal 2020.
The upcoming movies, including Mulan, Free Guy and Black Widow, are anticipated to aid the Studio Entertainment top line. The success of Frozen 2 and Star Wars: The Rise of Skywalker is positive for the company’s first-quarter fiscal 2020 results.
Moreover, growing popularity of Disney+ makes 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.
Other noteworthy reports we are featuring today include Coca-Cola (KO), Netflix (NFLX) and United Parcel Service (UPS).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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>>>