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Top Stock Reports for Bank of America, Abbott & Chevron

Sheraz Mian
·7-min read

Tuesday, July 21, 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 Bank of America (BAC), Abbott Laboratories (ABT) and Chevron (CVX). 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 >>>

Bank of America shares have lagged the broader market over the past year, reflecting cyclical weakness and an unfavorable interest rate backdrop. But the stock has nevertheless done better than the peer group (-19.4% vs. -26%) on the back of an expanding branch network, improved digital offerings and effective cost controls. 

The company has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. Its second-quarter 2020 results show impressive capital markets performance, partially offset by reserve builds and lower rates. A 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. Thus, loan growth is expected to be muted. Further, dependence on capital markets performance makes us apprehensive, given its cyclical nature.

(You can read the full research report on Bank of America here >>>)

Shares of Abbott have gained +7.5% over the past six months against the Zacks Medical Products industry’s fall of -8.2%. The Zacks analyst believes that the branded generics and international diabetes businesses should drive growth in the coming quarters. New product launches and acquisitions should boost sales further.

Abbott posted better-than-expected numbers for the second quarter. However, the figures declined year over year. Despite $615 million of COVID-19 diagnostic testing-related sales, this year-over-year decline was primarily due to the pandemic-led fall in procedure volumes in many businesses.

However, the company’s Diabetes Care, Nutrition, and EPD arms collectively grew more than 9% in the first half of 2020 leveraging on the pandemic situation. Apart from the launch of COVID-19 tests, the company also obtained FDA for Libre 2 as an iCGM. It also received CE Mark for TriClip.

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

Chevron’s shares have gained +7.2% over the past three months against the Zacks Integrated Oil industry’s fall of -0.2%. The Zacks analyst believes that the supermajor’s reserve replacement ratio of 44% is indicative of its inability to add proved reserves to its reserve base to the amount of oil and gas produced.

The company's worldwide production averaged a record 3,058 MBOE/d in 2019, reflecting an increase of 4.4% thanks to expansion in the lucrative Permian Basin. Chevron’s proposed Noble Energy takeover deal is anticipated to expand its footprint in the DJ Basin and the Permian Basin along with cash-generating offshore assets in Israel.

However, Chevron is not immune to this historic oil price crash, forcing it to cut capex and suspend buybacks. The company’s high oil price sensitivity is a concern too.

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

Other noteworthy reports we are featuring today include Danaher (DHR), Citigroup (C) and GlaxoSmithKline (GSK).

More Stock News: This Is Bigger than the iPhone!

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Sheraz Mian

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>>>

Today's Must Read

Digitization, New Branches Aid BofA (BAC) amid Lower Rates

Abbott (ABT) Thrives on COVID-19 Tests and New iCGM Approval

Chevron (CVX) to Boost Permian Position with Noble Buy

Featured Reports

Product Demand and Buyouts to Aid Danaher (DHR) Amid Pandemic

Per a Zacks analyst, Danaher (DHR) is poised to benefit from pandemic-induced demand for some products offered by the segments and also from acquired assets.

Cost Control Aids Citigroup (C), Low Consumer Banking A Woe

Per the Zacks analyst, downtrend in operating costs will aid Citigroup's bottom-line expansion. However, low rates and subdued consumer banking business amid coronavirus-induced slowdown are concerns.

Glaxo's (GSK) Pipeline Growing Amid Rising Competition

In 2020, Glaxo expects six potential approvals in oncology, HIV, and respiratory areas. However, competitive pressure on its HIV and respiratory drugs is rising, per the Zacks analyst.

Sony (SNE) Rides on Portfolio Restructuring Initiatives

Per the Zacks analyst, Sony is likely to benefit from the focus on its premium segment to stoke long-term growth and enhance profitability.

Expanding Cloud Portfolio & Partner Base Aids VMWare (VMW)

Per the Zacks analyst, VMware is benefiting from strong demand for its expanding cloud-based solutions, strong partner base and Carbon Black & Pivotal acquisitions.

Debt Reductions, Randgold Acquisition Aid Barrick (GOLD)

While Barrick faces challenges from higher production costs, it should gain from its actions to cut debt and synergies of the Randgold buyout, per the Zacks analyst.

Ground Revenues Aid FedEx (FDX) Amid Express Weakness

The Zacks analyst is impressed by the surge in Ground revenues, thanks to residential delivery volume growth. However, persistent weakness of the Express unit is concerning.

New Upgrades

Micron (MU) Benefits from Growing Memory-Chip Demand

Per the Zacks analyst, Micron is growing on solid memory-chip demand from data-center operators as the coronavirus crisis has boosted the work-and-learn-from-home and online services trends.

Hanesbrands (HBI) Sales to Gain on Robust Online Business

Per the Zacks analyst, Hanesbrands is set to gain from its online business investments, especially as social distancing has increased digital shopping. Notably, online sales rose 5% in first quarter.

Gimatics Buyout Drives Barnes Group (B) in Automation Market

Per the Zacks analyst, Barnes Group will continue to benefit from its Gimatics buyout, which has been strengthening its portfolio of robotic technology solutions in the industrial automation market.

New Downgrades

Pandemic-Led Procedural Delay Ails Boston Scientific (BSX)

The Zacks analyst worries about Boston Scientific's pandemic-led global supply chain disruption and procedural deferrals causing a significant slash in its revenues.

AIG Continues to Grapple With Lower Revenues & High Debts

Per the Zacks analyst, the company's revenues are likely to remain strained due to the COVID-19 pandemic. Its rising debt level leading to interest expenses continues to be a financial risk.

Regulatory Approval Delays, High Costs Hurt PG&E Corp (PCG)

Per the Zacks Analyst, any delays in acquiring regulatory approvals may impact financial performance. Moreover, PG&E Corp. incurs high costs for the clean-up and repair of the utility's facilities.

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GlaxoSmithKline plc (GSK) : Free Stock Analysis Report
Danaher Corporation (DHR) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
Citigroup Inc. (C) : Free Stock Analysis Report
Bank of America Corporation (BAC) : Free Stock Analysis Report
Abbott Laboratories (ABT) : Free Stock Analysis Report
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