Today's Must Read
Strategic Mergers Aid Boeing (BA), Low 737 Deliveries Hurt
Solid Assets Balance Aids Blackstone (BX), Costs a Concern
Friday, January 24, 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 Intel (INTC), Boeing (BA) and Blackstone Group (BX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Intel’s shares have outperformed the Zacks General Semiconductor industry over the past year (+44.6% vs. +40.8%). The Zacks analyst believes that Strong mix of high-performance 2nd-Gen Xeon Scalable processors and solid demand from Cloud service providers drove Data Center Group revenues. Intel’s fourth-quarter 2019 results were driven by strong data-centric growth.
Moreover, the PC-centric business benefited from higher modem sales and desktop platform volumes. Intel witnessed strong momentum for its first 10-nanometer (nm) mobile CPU, Ice Lake, with 44 system designs already shipping. The company is planning nine product releases on 10 nm this year. Moreover, it is adding 25% wafer capacity across its 14 nm and 10 nm nodes in 2020.
However, a declining PC total addressable market, higher expenses pertaining to 10-nm ramp up and constrained supply are concerns. Moreover, intensifying competition from AMD is a headwind.
Shares of Boeing have lost -7.9% in the past six months against the Zacks Aerospace & Defense industry's rise of +2.1%. The Zacks analyst believes that Boeing’s proposed joint venture with Embraer is expected to strengthen its commercial business significantly, which is expected to be accretive to its earnings at the start of 2020.
Looking ahead, the current U.S. government’s inclination toward strengthening the nation’s defense system should act as a growth catalyst for defense players like Boeing. However, Boeing's commercial business has suffering due to lower 737 deliveries, following 737 Max product line's grounding and subsequent costs associated with it.
Its commercial deliveries plunged 67% year over year, resulting in a huge 41% decline in the unit’s revenues during the third quarter. Consequently, its earnings and cash flow position were also affected significantly.
Blackstone’s shares have gained +9.4% over the past three months against the Zacks Electric Power industry's rise of +4.5%. The Zacks analyst believes that the company remains well-poised to capitalize from its fund-raising ability. It is expected to benefit from revenue mix, persistent asset inflows and inorganic growth initiatives.
Also, the company’s conversion from a publicly traded partnership to a corporation is expected to help in attracting more investors for its stock. However, continuously increasing expenses (mainly owing to higher general and administrative costs) are expected to hamper the bottom line to an extent. Moreover, lower chances of sustainability of the company’s capital deployment activities remain a major concern.
Other noteworthy reports we are featuring today include Johnson & Johnson (JNJ), Kinder Morgan (KMI) and Sempra Energy (SRE).
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Director of Research
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>>>