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Top Stock Reports for Wells Fargo, Honeywell & Northrop Grumman

Thursday, November 17, 2022

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 Wells Fargo & Company (WFC), Honeywell International Inc. (HON) and Northrop Grumman Corporation (NOC). 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 >>>

Wells Fargo shares have outperformed the Zacks Banks - Major Regional industry over the past six-month period (+9.7% vs. +5.2%). The Zacks analyst believes that the company’s progress on efficiency initiatives propelled expense control and savings, which are likely to support its bottom line in upcoming period. Strength in the deposit balance will aid the bank’s liquidity position. The company’s solid liquidity position will help to meet its debt obligations if the economic situation worsens. Also, capital deployment activities seem sustainable.

However, due to legal hassles, Wells Fargo has been penalized with business restrictions and a monetary fine. Restrictions on asset growth will continue to limit loan expansion ability. A decline in originations might limit mortgage banking income.

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

Honeywell International shares have gained +2.7% over the year-to-date period against the Zacks Diversified Operations industry’s loss of -16.1%. The Zacks analyst believes that healthy demand, orders and backlog bode well for Honeywell’s growth. Recovery in commercial flight hours is driving revenues at the Aerospace segment, while the Building Technologies segment is benefiting from commercial actions and strength in building products and building solutions. The company’s measures to reward its shareholders through dividends and share buybacks are encouraging.

However, supply chain constraints, labor market challenges and inflationary pressures are hurting the company’s operations. Weakness in the Safety and Productivity Solutions sales due to lower personal protective equipment and warehouse automation volume is an added concern. Also, adverse foreign currency movements are affecting the company’s bottom line.

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

Northrop Grumman shares have outperformed the Zacks Aerospace - Defense industry over the year-to-date period (+30.5% vs. -1.6%). The Zacks analyst believes that Northrop Grumman has developed into one of the top largest U.S. defense contractors in terms of revenues, with a major platform-centric focus. It continues to witness strong demand for its products, driven by programs like F-35, Triton and SABR radar Global Hawk and the E-2D program. Solid U.S. budgetary provisions make one confident about a solid inflow of contracts from Pentagon for it. It also holds a strong solvency position, at least in the short term. Its shares have outperformed the industry in the past year.

However, a comparative analysis of the stock’s trailing 12-month EV/Sales ratio reflects a relatively gloomy picture that might be a cause of concern. It fears that the continued spread of COVID-19 may cause extended disruption in its supply chain.

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

Other noteworthy reports we are featuring today include The Travelers Companies, Inc. (TRV), U.S. Bancorp (USB), and GSK plc (GSK).

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

Cost Control Aids Wells Fargo (WFC) Amid Declining Revenues

Aerospace Aids Honeywell (HON) Amid Supply Chain Woes

Solid Demand Aids Northrop (NOC), Supply Chain Turmoil Woes

Featured Reports

Upbeat Driver-Supply Aids Lyft (LYFT), Economic Woes Ail
The Zacks analyst is impressed with the increase in supply of drivers at Lyft. However, the economic slowdown prompts Lyft to resort to job-cuts lately.

Digitization, Buyouts Aid Carvana (CVNA) Amid High Interest
Per the Zacks analyst, Carvana's e-commerce platform and ADESA acquisition are set to boost its prospects. But, high interest rates are likely to dampen retail sales in the coming quarter.

Lumen (LUMN) to Gain from Momentum in Quantum Fiber Business
Per the Zacks analyst, Lumen's performance is likely to gain from the company's investment in its growth initiatives for the Enterprise business and ramping of the Quantum Fiber business going ahead.

Urban Outfitters' (URBN) Witnesses Higher SG&A Expenses
Per the Zacks analyst, Urban Outfitters has been witnessing increased SG&A expenses for a while now. Higher marketing and creative spend to aid digital growth increases SG&A costs.

Travelers' (TRV) Auto & Homeowners Aids, Cat Loss Hurts
Per the Zacks analyst, Travelers is set to grow on the continued progress and growth at the profitable agency auto and homeowners business. However, exposure to cat loss induces earnings volatility.

Rising Loans to Aid U.S. Bancorp (USB), Mounting Costs Ail
Per Zacks analyst, rising loans and deposits, backed by U.S. Bancorp's solid business model and initiatives to expand market share, might support growth. Yet, persistent rising costs is concerning.

Glaxo's (GSK) Specialty Drugs Driving Sales in 2022
Glaxo's specialty products like Dovato, Nucala, Trelegy Ellipta, Shingrix are driving sales, making up for a lower sales of established drugs due to generic erosion, per the Zacks analyst.

New Upgrades

Steady Growth in Global Generics Markets Aid Dr. Reddy's (RDY)
Per the Zacks analyst, Dr. Reddy's is witnessing healthy growth across its branded and global generics markets. Efforts on strengthening its presence in the biosimilars market also bode well.

Phillips 66 (PSX) to Gain From Higher Distillate Fuel Demand
Per the Zacks analyst, Phillips 66 is well-positioned to benefit from higher distillate fuel demand amid changes in the marine fuel sulfur limits.

Fortinet (FTNT) Rides on Product Strength, Marketing Efforts
Per the Zacks analyst, Fortinet is gaining from solid contributions of its growth-oriented products Security Fabric, cloud and SD-WAN. Increasing marketing efforts are also a positive.

New Downgrades

Lower Sales Volume & High Costs to Hurt Weyerhaeuser (WY)
Per the Zacks analyst, low volumes, lower export sales realizations and volumes due to weak demand and a reduction in export activity to hurt Weyerhaeuser's results.

Worsening Asset Quality, Costs Hurt Ally Financial (ALLY)
Per the Zacks analyst, poor asset quality amid deteriorating macroeconomic outlook is major headwind for Ally Financial. Steadily rising expenses are expected to hurt its bottom-line to some extent.

Supply Chain Issues and Rising Cost Hit SolarEdge (SEDG)
Per the Zacks analyst, constraints in the global transportation system may continue to disrupt SolarEdge's logistics supply chain that tend to increase its ocean freight cost and hamper its earnings

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
Wells Fargo & Company (WFC) : Free Stock Analysis Report
GSK PLC Sponsored ADR (GSK) : Free Stock Analysis Report
Honeywell International Inc. (HON) : Free Stock Analysis Report
U.S. Bancorp (USB) : Free Stock Analysis Report
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
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