Today's Must Read
Expansion Strategy Aids Equinix (EQIX) Amid Competition
Rising Farm Income to Aid Deere (DE), Coronavirus a Woe
Tuesday, March 31, 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 American Tower (AMT), Equinix (EQIX) and Deere (DE). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
American Tower’s shares have outperformed the Zacks REIT and Equity Trust industry over the past six months (+1.2% vs. -18.6). The Zacks analyst believes that American Tower is enhancing its macro-tower portfolio and focusing on innovation to capture the underlying opportunities.
Rise in mobile-data usage and higher investments in 4G as well as 5G technology is spurring demand for its telecom towers. Therefore, this will likely drive the company’s leasing activity and organic tenant billings growth in the upcoming period. Moreover, the company is expanding its international presence, which opens up new areas of growth.
Nevertheless, the company has a substantially-leveraged balance sheet. Such high-debt levels might impede cash-flow growth. Additionally, consolidation trends in the telecom sector pose a cause of worry for the company. Furthermore, stiff competition in the tower industry is another concern.
Shares of Equinix have gained +37.5% over the past year against the Zacks REIT and Equity Trust – Retail industry’s fall of -35.9%. The Zacks analyst believes that a global footprint and solid interconnected ecosystems has helped the company deliver its 17th year of consecutive quarterly revenue growth, though rising debt burden might affect its operating results as interest expenses flare up.
The company recently completed the acquisition of Packet, a leader in the bare metal automation space. Moreover, the company announced that it opened its fourth International business Exchange data center in Melbourne, Australia. The company’s fourth-quarter 2019 results reflect healthy top-line growth.
Amid higher demand from cloud users, it remains committed to expand its International Business Exchange platform. However, consolidation in the telecommunications industry might mar demand for co-location space, hurting its growth.
Deere’s shares have lost -18% over the past three months against the Zacks Farm Equipment industry’s fall of -20.8%. The Zacks analyst believes that acquisitions, introduction of advanced technologies in its products and efforts to expand in precision agriculture will drive the company’s growth.
Deere has withdrawn fiscal 2020 guidance citing that the impact of the coronavirus pandemic on its results cannot be reasonably estimated at this time. Demand for its products and services and supply chain are likely to be impacted. The company anticipates expedited freight costs to make up for the disruption in the supply, which will dent margins.
Further, temporary closures owing to restrictions imposed by the governments will hinder this year’s performance. Construction & Forestry segment sales will bear the brunt of weak construction activity and the company’s efforts to lower production this fiscal. Nevertheless, growing U.S farm income bodes well for agricultural equipment demand.
Other noteworthy reports we are featuring today include NVIDIA (NVDA), Bristol-Myers Squibb (BMY) and NextEra Energy (NEE).
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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>>>