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The Zacks Analyst Blog Highlights: Visa, United Technologies, United Parcel Service, Exxon Mobil and Hormel Foods

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For Immediate Release

Chicago, IL – August 28, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Visa (V - Free Report) , United Technologies , United Parcel Service (UPS - Free Report) , Exxon Mobil (XOM - Free Report) and Hormel Foods (HRL - Free Report) .

Here are highlights from Tuesday’s Analyst Blog:

Top Research Reports for Visa, United Technologies and UPS

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features updated research reports on 16 major stocks, including Visa, United Technologies and United Parcel Service. These research reports have been hand-picked from roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Visa’s shares have outperformed the Zacks Financial Transaction Services industry in the past year, gaining +22.3% vs. a +20.5% increase. The Zacks analyst thinks numerous acquisitions and alliances plus technology upgrades and effective marketing have paved the way for long-term growth and consistent increase in revenues.

The acquisition of Visa Europe is a long-term growth strategy for the company. Its international business has been expanding and adds diversification benefits. The company’s strong capital position facilitates business investments. Its earnings of $1.37 per share beat the Zacks Consensus Estimate by 3.1% and grew 14% year over year, led by growth in payments volume, cross-border volume and processed transactions.

However, high client incentives and expenses weigh on its operating margin. Adverse foreign exchange volatility imparts instability to the company’s earnings.

Shares of United Technologies have gained +17.9% year to date, outperforming the Zacks Diversified Operations industry, which has increased +10.7% over the same period. The Zacks analyst thinks strength in commercial aftermarket and military businesses coupled with high defense spending in the United States is likely to boost revenues of the company’s aerospace business.

Also, a favorable mix in Otis new equipment orders is likely to be a tailwind for the commercial business. For 2019, United Technologies has revised up earnings view to $7.90-$8.05 per share from the prior guidance of $7.80-$8.00. Notably, the company’s cost reduction and operational excellence initiatives are likely to boost its profitability.

Also, the Rockwell Collins buyout is likely to boost sales in 2019. In addition, a strong cash position and focus on rewarding shareholders handsomely through dividends and share repurchases will work in its favor.

United Parcel Service’s shares have outperformed the Zacks Transportation - Air Freight and Cargo industry year to date, gaining +17.2% vs. +8.8%. The Zacks analyst likes UPS' efforts to reward its shareholders through dividends and buybacks. In 2018, the company rewarded its shareholders to the tune of $4.2 billion.

Continuing its pro-investor approach, in February 2019, UPS increased its quarterly dividend by 5.5%. Robust free cash flow generation by UPS supports the possibility of a dividend hike going forward. E-commerce growth is an added positive at UPS and has been aiding results for the past few quarters. The trend is likely to continue as UPS anticipates cross-border e-commerce volume to grow by 28% during the 2019-2021 period.

However, UPS' high capital expenditures are worrisome and might hamper bottom-line growth moving ahead. Trade-related uncertainty with China also poses a threat to the company's growth. UPS' high debt equity ratio is also concerning.   

Other noteworthy reports we are featuring today include Exxon Mobil and Hormel Foods.

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