Top Analyst Reports for JPMorgan, Altria & NextEra

Friday, August 3, 2018

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 JPMorgan (JPM), Altria (MO) and NextEra (NEE). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

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

JPMorgan’s shares have outperformed the Zacks Major Regional Banks industry over the last six months (+6.8% vs. +1.4%). Also, the company has an impressive earnings surprise history, having surpassed expectations in each of the trailing four quarters. Its second quarter 2018 results were driven by higher-than-expected trading revenues, improvement in investment banking fees and rise in loans.

The Zacks analyst thinks expansion into new markets, focus on strengthening the card business, higher interest rates and rising loan demand will benefit the bank’s financials. Also, lower tax rates and easing of stringent regulations are expected to offer some support.

However, dismal mortgage banking (as originations continue to decline) remains a major concern. This is expected to hurt revenue growth to some extent in the near-term.

(You can read the full research report on JPMorgan here >>>).

Shares of Altria have outperformed the Zacks Tobacco industry in the last six months (-10.9% vs. -12.4%), Altria has been delivering year-over-year bottom-line growth for quite some time and maintained the upside in second-quarter 2018. Performance during the quarter was mainly backed by lower outstanding shares and reduced adjusted tax rate. In fact, solid performance in the first half of 2018 propelled management to raise 2018 view.

The Zacks analyst thinks Altria has been progressing well with reduced risk products. Pricing also continues to drive the company’s top line. On the flip side, stern FDA regulations combined with increased health consciousness has been taking a toll on cigarette sales.

Notably, cigarette shipment volumes fell 10.8% year over year during second quarter, wherein total cigarette retail share declined 50.2%. But volumes in this category are expected to remain soft in the forthcoming periods, owing industry-wide headwinds.

(You can read the full research report on Altria here >>>).

NextEra’s shares have outperformed the Zacks Electric Power industry over the last year (the stock is up +15.5% vs. the -4.1% decline for the industry). Second-quarter earnings were higher than estimates, courtesy of strong performance of both its subsidiaries.

The Zacks analyst thinks NextEra Energy’s investment to strengthen its infrastructure and ongoing capital projects, when completed, will help it serve its expanding customer base more efficiently. The expansion of its natural gas operation through strategic acquisitions is going to have a positive impact on earnings.

However, the company’s nature of business is subject to complex and comprehensive federal, state and other regulations. Substantial investments are undertaken to ensure the safety of nuclear operation. That said, the risk of unplanned outages remains, which could derail its normal operation and impact profitability.

(You can read the full research report on NextEra here >>>).

Other noteworthy reports we are featuring today include Tesla (TSLA), Prudential (PRU) and Illinois Tool Works (ITW).

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Mark Vickery

Senior Editor

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>>>

Today's Must Read

Branch Expansion to Aid JPMorgan (JPM), Mortgage Fees a Woe

Pricing & Smokeless Unit Aids Altria (MO), Cigarette Volumes a Woe

Customer Additions, Ongoing Investments Aid NextEra (NEE)

Featured Reports

Tesla (TSLA) Rides on Production & Energy Storage Deployment

Per the Zacks analyst, Tesla gains from solid strides in vehicle production, deliveries and infrastructure. Also, its focus on adding energy storage capacity is boosting to its growth momentum.

Exposure to Annuities, Universal Life Ails Prudential (PRU)

Per the Zacks analyst, Prudential's exposure to products like annuities and universal life guarantying minimum return could stress capital.

Solid Demand to Aid Illinois Tool (ITW), Forex & Costs Drags

Per a Zacks analyst, Illinois Tool Works stands to gain from strengthening demand for its products in end-markets.

Strategic Initiatives Aid Huntington (HBAN), High Costs a Woe

Per the Zacks analyst, Huntington's strategic initiatives, including expansion moves and rise in loans should bolster revenue growth.

Fidelity National (FIS) to Benefit from Digital Initiatives

Per the Zacks analyst, Fidelity continues to bolster its position in financial and payments solutions business through investment in mobile banking.

Harris (HRS) Poised for Top-Line Growth, Margin Woes Deter

Per the Zacks analyst, despite nagging margin woes, Harris' revenue generating capabilities are buoyed by the possibility of greater U.S. military spending owing to tensions with North Korea and Iran.

Strong Investment Pipeline to Aid Realty Income's (O) Growth

Per the Zacks analyst, Realty Income will gain from solid investments and focus on service, non-discretionary and low-price retail business tenants.

New Upgrades

Fortinet (FTNT) Rides on Shift to Subscription Services

Per the Zacks analyst, Fortinet's focus on selling more subscription-based services is helping the company generate stable revenues and higher margins.

Downstream Expansion, Demilec Buyout Drive Huntsman (HUN)

Per the Zacks analyst, Huntsman should gain from its actions to grow its downstream specialty and formulation businesses. The Demilec acquisition will also create significant synergies.

Genworth (GNW) Set to Grow on Strong U.S. Mortgage Business

Per the Zacks analyst, Genworth should grow on the back of solid U.S. Mortgage Business driven by lower new delinquency, loss mitigation programs and changes in aging of existing delinquencies.

New Downgrades

Higher Labor Costs Hurt Cheesecake Factory's (CAKE) Margins

Per the Zacks analyst, Cheesecake Factory's profits have been under pressure of late owing to a rising wage rates scenario. Moreover, expenses related to sales initiatives are also hurting margins.

Higher Expenses & Investments Hurt Ultimate Software (ULTI)

Per the Zacks analyst, intensifying competition in the HCM market, continuing investments in cloud solutions and higher operating expenses are major concerns for Ultimate Software.

DaVita (DVA) Grapples with Issues in DaVita Rx and GranuFlo

Sluggishness in the DaVita Rx unit is a headwind. The Zacks analyst is also worried about the GranuFlo unit that received a negative verdict from a U.S. jury recently.

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Tesla, Inc. (TSLA) : Free Stock Analysis Report
 
Prudential Financial, Inc. (PRU) : Free Stock Analysis Report
 
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
 
Altria Group, Inc. (MO) : Free Stock Analysis Report
 
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
 
Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report
 
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