Today's Must Read
Acquisitions Support Fidelity (FIS) Amid Increasing Expenses
Solid Balance Sheet, Revenue Rise Aid American Express (AXP)
Wednesday, March 25, 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 Facebook (FB), Fidelity National Information Services (FIS) and American Express (AXP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Facebook’s shares have outperformed the S&P 500 over the past six months (-10.6% vs. -17.3). The Zacks analyst believes that Facebook is benefiting from growth in Instagram Stories and Feed, and expanding user base in Asia Pacific.
The launch of Facebook View app, Facebook Pay, a simpler and faster Messenger for iOS app and more location control feature for Android users is a positive. However, Facebook expects ad-sales to be hurt by the coronavirus lockdowns despite a significant spike in traffic.
Moreover, increasing limitations in tracking user activity amid the growing privacy-related regulations and changes made in the mobile operating systems and browser platforms by Apple and Google as well as tools like the Off Facebook Activity controls are expected to affect top-line growth. Moreover, a persistent mix shift toward Stories is anticipated to weigh on ARPU.
Shares of Fidelity National Information Services have gained 7.6% over the past year against the Zacks Financial Transaction Services industry’s fall of 4.5%. The Zacks analyst believes that the company remains well poised for growth backed by attractive core business with several ongoing initiatives.
Acquisition of Worldpay is likely to accelerate growth by expanding its presence in fast growing markets. The company recently raised run-rate synergy targets to $1.23 billion from revenue and cost savings by 2022. Further, increasing investment in mobile banking and innovative products is likely to support the company's growth.
However, the company remains exposed to persistently rising costs and consolidation in the banking sector. Also, unsustainable capital deployment activities remain a concern.
American Express’ shares have lost 31.2% over the past three months against the Zacks Financial Miscellaneous Services industry’s fall of 35.8%. The Zacks analyst believes that due to COVID-19 outbreak, the company is witnessing weakness in spending volumes, which is likely to hurt its first quarter operating performance.
Its revenue growth is driven by a strong brand, continued efforts toward building business in new growth verticals, shift toward digital and a strong economy, which are driving consumer spending. Its strong balance sheet position and disciplined capital management are impressive.
However, the company's reward expenses have been increasing over the past many quarters, which weigh on margins. Cost of card member services has been increasing over the years, indicating higher engagement level across its premium travel services.
Other noteworthy reports we are featuring today include NVIDIA (NVDA), Advanced Micro Devices (AMD) and CSX Corp. (CSX).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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>>>