Today's Must Read
Enbridge (ENB) Banks on $11B Inventory of Midstream Projects
Productivity Actions, New Products to Aid DuPont (DD)
Wednesday, February 26, 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 Tesla (TSLA), Enbridge (ENB) and DuPont de Nemours (DD). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Tesla’s shares have outperformed the Zacks Domestic Automotive industry over the past year (+154.2% vs. +37.5%). The Zacks analyst believes that rising Model 3 delivery, which forms bulk of the automaker’s overall deliveries, is aiding the company’s top-line growth.
With Model 3 sedan being its flagship vehicle, Tesla has established itself as a leader in the EV segment. Tesla’s upcoming product launches, including Model Y and Semi Truck, are expected to further boost prospects.
However, with China being an important market for Tesla, economic slowdown in the country is weighing on the firm. Tesla’s massive debt and high capex also play spoilsports. Waning demand for Model S/X is another concern. Thus, investors are advised to wait for a better entry point.
Shares of Enbridge have gained +21.2% in the past six months against the Zacks Oil Production and Pipeline industry’s rise of +2.7%. The Zacks analyst believes that reduced contributions from Canadian Gas Transmission businesses have been affecting the firm.
The company has a total of $11 billion of low-risk inventory of midstream growth projects that will be going online since 2020 through 2023. Thus, the firm has secured additional stable fee-based revenues for the years to come. Moreover, Enbridge has been strongly committed to returning cash to shareholders.
The company recently received authorization from the board of directors to hike the quarterly dividend payout for 2020. However, Enbridge recently reported weak fourth-quarter earnings due to lower contributions from Mainline System. The firm’s significant exposure to debt is also a concern.
DuPont de Nemours’ shares have lost -27.6% over the past three months against the Zacks Diversified Chemicals industry’s fall of -13.9%. The Zacks analyst believes that DuPont will benefit from its ongoing investment in innovation and new product development. New product launches across high growth markets will drive its top line.
DuPont’s cost and productivity improvement actions should also support its margins. The company also remains focused on driving cash flow and shareholder value. Actions to divest non-core assets and focus on growth areas should also boost its performance.
However, weak demand across a number of markets including automotive and semiconductor are likely to hurt DuPont’s volumes. Weak pricing is also expected to weigh on its sales and margins in 2020. The company also faces headwinds from higher manufacturing costs and unfavorable currency swings.
Other noteworthy reports we are featuring today include HP (HPQ), Delta Air Lines (DAL) and Palo Alto Networks (PANW).
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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>>>