Today's Must Read
Loan Growth, Branch Openings Aid BofA (BAC) amid Lower Rates
Order Growth Aids Lockheed (LMT), Turkey Tiff Poses Risk
Friday, June 5, 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 Amazon.com (AMZN), Bank of America (BAC) and Lockheed Martin (LMT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amazon’s shares have outperformed the broader market over the past year (+40.3% vs. +9.5%). The Zacks analyst believes that Amazon is gaining on robust AWS services. Strong adoption rate of AWS is aiding its cloud dominance.
Further, AWS is gaining solid traction among healthcare workers, medical researchers, educational institutions and government organizations owing to coronavirus management measures. Further, Prime momentum owing to fast delivery services and strong content portfolio is benefiting Amazon.
Also, expanding distribution strength and workforce which are helping in addressing the overflowing online orders during this pandemic are major positives. Furthermore, robust Alexa skills and strong smart home product offerings are tailwinds. However, growing coronavirus related expenses might hurt Amazon’s profitability. Also, foreign exchange headwinds and rising cloud competition are risks.
Shares of Bank of America have lost -20.4% over the past six months against the Zacks Major Regional Banks industry’s fall of -26.3%. The Zacks analyst believes that opening new branches, improved digital offerings and efforts to manage costs will likely aid profitability.
Additionally, strong balance sheet and liquidity position are expected to continue supporting the company's financials amid economic slowdown. However, near-zero interest rates are expected to hurt the bank’s margins and interest income.
Also, coronavirus-induced concerns will likely continue to hamper business activities and thus, loan growth is expected to be muted. Further, dependence on capital markets performance makes us apprehensive, given its cyclical nature. This is likely to hurt fee income growth to some extent
Lockheed Martin’s shares have gained +5.5% over the past three months against the Zacks Aerospace Defense industry’s fall of -9.4%. The Zacks analyst believes that expansionary budgetary provisions made by the current U.S. administration will immensely boost this defense prime's business. It continues to be a strong cash generator.
Lockheed Martin enjoys strong demand for its high-end military equipment in domestic and international markets, being the world’s largest defense contractor. However, Lockheed Martin faces intense global competition for its broad portfolio of products and services.
Furthermore, forced cost reduction initiatives for the F-35 program might hamper its operating results. America and Turkey’s tiff on the later accepting Russian products may hurt Lockheed’s component supply from Turkey. It is also facing performance issues in relation to some of its products, which in turn may hurt its results.
Other noteworthy reports we are featuring today include Alphabet (GOOGL), Micron Technology (MU) and Charles Schwab (SCHW).
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Director of Research
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>>>