Top Stock Reports for Apple, PNC Financial & Twitter

Tuesday, January 22, 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 Apple (AAPL), PNC Financial (PNC) and Twitter (TWTR). 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 >>>

Apple’s shares have declined -11.4% in the past year and have underperformed the broader market with the S&P 500 losing -5.9% over the same period. Apple cut its first-quarter fiscal 2019 sales guidance citing weak demand in Greater China and fewer upgrades to its flagship device.

Reportedly, the company has also lowered new iPhone production plan by almost 10% for the next three months. Apart from weak China demand, Apple is suffering from its failure to penetrate rapidly growing but price sensitive markets of Asia, particularly India. The company continues to lose share in the smartphone market due to increasing competition from Chinese handset makers.

Nevertheless, the Zacks analyst thinks its services segment is likely to grow strongly driven by increasing adoption of Apple Music & Apple Pay. Further, robust demand for wearables is noteworthy. Meanwhile, estimates have been stable lately ahead of the company’s Q1 earnings release. The company has positive record of earnings surprises in recent quarters.

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

Shares of PNC Financial have underperformed the Zacks Major Regional Banks industry over the past six months, decreasing 13.1% vs. -8.8%. Yet, the company has an impressive earnings surprise history, having surpassed expectations in three of the trailing four quarters.

Fourth-quarter results were affected by decline in fee income and higher provisions. Yet, expanding margins and higher loans came as tailwinds. The Zacks analyst likes the company's efforts to expand middle market lending franchise and investments in digital products and services.

Moreover, involvement in strategic acquisitions helped it in boosting fee income. PNC Financial's top line continues to benefit from rising rate environment as well. However, the company’s rising cost base deters bottom-line growth. Also, lack of diversification in its loan portfolio is a concern.

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

Strong-Buy ranked Twitter’s shares have outperformed the Zacks Computer Software industry in the past year, gaining +46.2% vs. +5.8%. Twitter continues to add new features and ramp up its security measures to lure users to its platform and boost engagement levels.

The Zacks analyst thinks the company’s investment in series of live streaming deals is a positive. Twitter is also benefiting from strong growth in international markets and video advertisements. Growing adoption of video ad products like Video Website Cards & Video App Cards is driving top line for Twitter.

Notably, the company has a positive record of earnings surprises in recent quarters. However, lack of revenue diversification is a major concern for the company. Moreover, Twitter is now facing civil proceedings in Russia for failing to comply with local data laws, which is a headwind.

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

Other noteworthy reports we are featuring today include Northrop Grumman (NOC), Concho Resources (CXO) and TJX Companies (TJX).

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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

Apple (AAPL) Banks on Services, Slowing iPhone Demand Ails

Cost Savings Aid PNC, High Exposure to Commercial Loans Ails

New Features, Security Focus to Aid Twitter's (TWTR) Growth

Featured Reports

Solid Comps to Fuel TJX Companies (TJX), Wage Costs a Worry

Per the Zacks analyst, TJX Companies is set to keep gaining from comps growth, which is expected to rise 5% in fiscal 2019. However, gross margin remains strained due to high wage and freight costs.

Concho (CXO) Rides on RSP Permian Buy, High Capex a Concern

The $9.5 billion RSP Permian buyout has bolstered Concho's scale and prospects in the prolific Permian play.

ONETractor Initiative to Drive Tractor Supply's (TSCO) Sales

Per the Zacks analyst, Tractor Supply's investments in the ONETractor initiative, which is focused on integrating physical and digital operations, should aid top line growth in the long run.

G-P Acquisition, High Margin Products Drive Ingevity (NGVT)

Per the Zacks analyst, Ingevity should gain from synergies of Georgia-Pacific's (G-P) pine chemicals business buyout.

Altice (ATUS) to Benefit From Network Build-Out Strategy

Per the Zacks analyst, Altice's strategy of building next-generation fiber network to meet demand for increasing data speed and supporting evolving technologies augurs well for future revenue growth.

Five Below's (FIVE) Focus on Pre-Teen Customers to Fuel Sales

Per the Zacks analyst, Five Below's impressive merchandise, focus on pre-teen customers & pricing strategy should drive sales.

Focus on Hospitality, New Galleries To Boost RH's (RH) Sales

Per the Zacks analyst, new initiatives across gallery openings, the expansion in hospitality and the extension of the RH brand are expected to boost growth for RH.

New Upgrades

Product Innovation, Orbital Acquisition Aids Northrop (NOC)

Per the Zacks analyst, Northrop's product innovation will help maintain a stable earnings stream. With the Orbital ATK buyout, Northrop looks to benefit from rocket motors and missile product lines.

Improving User Engagement, Partnerships to Drive Snap (SNAP)

Per the Zacks analyst, extended partnerships with the likes of Comcast and Viacom related to new content production are expected to boost Snap's audience base as well as user engagement.

Abiomed (ABMD) Gains From Solid Prospects in Impella Platform

Abiomed has been gaining from its flagship Impella platform. The Zacks analyst is particularly upbeat about Impella's patient success stories and strong global adoptions.

New Downgrades

Escalating Expenses Continue to Hurt CNA Financial (CNA)

Per the Zacks analyst, rising expenses, mainly due to higher net incurred claims and benefits plus amortization of deferred acquisition costs, will restrict CNA Financial's operating margin expansion.

Broadridge (BR) Hurt by High Debt, Client Concentration

The Zacks analyst believes that high debt may limit Broadridge's future expansion and worsen its risk profile. Loss of any of its clients can affect the company's operating performance.

Pricing Issues, Competition Remian Concerns for Perrigo (PRGO).

Per the Zacks analyst, Perrigo's businesses continue to be impacted by pricing and other macro-economic pressures.

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Twitter, Inc. (TWTR) : Free Stock Analysis Report
 
The TJX Companies, Inc. (TJX) : Free Stock Analysis Report
 
The PNC Financial Services Group, Inc (PNC) : Free Stock Analysis Report
 
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
 
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