Today's Must Read
Chevron (CVX) to Gain from Massive Permian Acreage
Consulting Strength Aids Accenture (ACN), Competition Rife
Thursday, February 27, 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 Microsoft (MSFT), Chevron (CVX) and Accenture (ACN). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Microsoft’s shares have outperformed the S&P 500 over the past year (+51.9% vs. +11%). The Zacks analyst believes that the ongoing expansion in Microsoft Teams’ subscriber base improved the company’s competitive edge in the enterprise communication market against Slack and Zoom.
Microsoft’s stellar second-quarter fiscal 2020 results reflected robust Commercial business and Azure’s expanding customer base. Furthermore, the company is well poised to widen the total addressable market through acquisitions of GitHub and PlayFab.
However, management doesn’t expect to meet its previous projection for third-quarter fiscal 2020 revenues at More Personal Computing due to the coronavirus outbreak in China. This, in turn, raises investors’ concerns, at least in the near term.
Shares of Chevron have lost 16.9% in the past three months against the Zacks Integrated Oil industry’s fall of 18.8%. The Zacks analyst believes that Chevron is one of the best-placed global integrated oil companies to achieve sustainable production ramp-up. America’s No. 2 energy company’s existing project pipeline is among the best in the industry, thanks to planned expansion in the lucrative Permian Basin.
Chevron’s substantial Permian holdings of 2.2 million net acres realized production growth of 154 MBOE/d in 2019 with Chevron targeting output of 900 MBOE/d in 2023. Chevron’s well economics in the unconventional play also continues to improve as it has been able to achieve a 40% reduction in its expenses since 2015. Consequently, Chevron is viewed a preferred energy major to own now.
Accenture’s shares have lost -0.6% over the past six months against the Zacks Consulting industry’s rise of +1.2%. The Zacks analyst believes that the company’s strong operating cash flow has helped it reward its shareholders in the form of dividends and share repurchases, and pursue opportunities in areas that show true potential.
The company has been strategically enhancing its cloud and digital marketing suite through acquisitions and partnerships. Accenture is currently a global leader in the Salesforce implementation service space.
However, Accenture continues to face pricing pressure due to significant competition from strong companies like Genpact, Cognizant and Infosys. Global presence exposes Accenture to foreign currency exchange rate fluctuations. Buyout-related integration risks is a concern.
Other noteworthy reports we are featuring today include Coca-Cola (KO), PNC Financial Services (PNC) and Charles Schwab (SCHW).
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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>>>