Today's Must Read
ExxonMobil (XOM) Banks on Key Oil Projects, Downstream Weak
Digital Efforts to Aid NIKE (NKE) Sales, Coronavirus to Hurt
Tuesday, March 10, 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 AT&T Inc. (T), Exxon Mobil Corp. (XOM) and Nike, Inc. (NKE). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
AT&T’s shares have outperformed the Zacks Wireless National industry over the past one-year period (+14.8% vs. +5.6%). AT&T’s wireless growth opportunities with the widespread launch of mobile 5G services in 2019 remain impressive. Incremental contribution from WarnerMedia and Xandr segments also bode well.
However, the company is witnessing a steady decline in linear TV subscribers and legacy services. Its wireline division is also facing loss in access line due to competitive pressure from VoIP service providers. As AT&T tries to woo customers with discounts, freebies and cash credits, margin pressures tend to soar.
Exxon Mobil’s shares have declined 40% so far this year against the Zacks Oil and Gas - Integrated – International industry’s fall of 38.6%. Exxon Mobil witnessed significantly lower earnings from its downstream & chemicals businesses in 2019. With no near-term resurgence in demand in the horizon, the business segments’ performances are not expected to improve anytime soon.
However, the company’s bellwether status in the energy space, optimal integrated capital structure that has historically produced industry-leading returns and management’s track record of capex discipline across the commodity price cycle make it a relatively lower-risk energy sector play.
Nike’s shares have declined 17% on a year-to-date basis against the Zacks Shoes and Retail Apparel industry’s fall of 18.3%. Shares of Nike have declined year to date as analysts are concerned about the coronavirus outbreak in china and its effects on Nike’s results. The company, in February, temporarily closed nearly half of company-owned stores in Greater China, which should hurt its results. Moreover, concerns related to higher operating costs, tariffs and foreign currency may hurt performance in the near term.
However, it reported strong second-quarter fiscal 2020 results gaining from the execution of Consumer Direct Offense, and strength in Wholesale and Nike Direct businesses. It expects brand recognition, robust innovation and positive response from Nike Direct and wholesale partners to aid results in fiscal 2020.
Other noteworthy reports we are featuring today include The Boeing Company (BA), Verizon Communications Inc. (VZ) and Cognizant Technology Solutions Corporation (CTSH).
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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>>>