Today's Must Read
P&G's (PG) Productivity & Cost Savings Plan to Aid Margins
Royal Dutch Shell (RDS.A) to Gain from Growing LNG Demand
Friday, March 6, 2020
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Alphabet (GOOGL), Procter & Gamble (PG) and Royal Dutch Shell (RDS.A). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Alphabet’s shares have outperformed the Zacks Computer Software industry over the past six months (+9.1% vs. +5.4%). The Zacks analyst believes that Alphabet's strengthening cloud unit is aiding substantial revenue growth. Moreover, expanding data centers will continue to bolster its presence in the cloud space.
Further, major updates in its search segment are enhancing the search results, which is a major positive. Moreover, Google’s robust mobile search is gaining solid momentum. Additionally, strong focus on innovation of AI techniques and the home automation space should aid business growth in the long term.
Further, its deepening focus on wearables category remains a tailwind. However, the company’s growing litigation issues and increasing expenses might hurt profitability. Further, the company faces persistent pressure from advertisers to tighten controls on YouTube video service. This remains a concern.
Shares of Procter & Gamble have gained +23.5% over the past year against the Zacks Soap and Cleaning Materials industry’s rise of +15.2%. The Zacks analyst the company’s solid second-quarter fiscal 2020 earnings mark the continuation of its positive surprise trend.
Further, earnings and sales improved year over year in the reported quarter on gains from productivity efforts, robust volume, favorable mix and pricing. Total productivity cost savings aided core currency-neutral gross and operating margin by 120 bps and 220 bps, respectively. Further, it delivered adjusted free cash flow productivity of 100%.
Backed by strong organic sales growth, core earnings and returns to shareholders in the fiscal second quarter, the company raised its view for fiscal 2020. However, currency fluctuations remain concerning. Nevertheless, gains from acquisitions and divestitures are likely to partly offset the currency headwinds.
Royal Dutch Shell’s shares have gained +11.7% over the past three months against the Zacks International Integrated Oil industry’s rise of +0.6%. The Zacks analyst believes that Royal Dutch Shell’s position as a key supplier of liquefied natural gas should further benefit its long-term cash flow growth on the back of attractive growth opportunities.
With a current dividend yield of more than 8%, Shell is an attractive pick for long-term investors. While the company has not raised payout since 2014, it still offers the highest yield in its group. Thus, the company's dividend appears safe & reliable.
Europe's largest oil company’s Q4 earnings missed analysts' expectations stemming from lower oil and gas prices. There are worries over the company’s poor reserve replacement ratio thereby raising concerns about future production. Hence, the stock warrants a cautious stance.
Other noteworthy reports we are featuring today include Alibaba (BABA), Amgen (AMGN) and Enterprise Products (EPD).
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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>>>