Q3 Earnings Scorecard and Analyst Reports for Tesla, JPMorgan & Comcast

Wednesday, November 25, 2020

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features an update on the ongoing Q3 earnings season, in addition to featuring new research reports on 16 major stocks, including Tesla (TSLA), JPMorgan Chase (JPM) and Comcast (CMCSA). 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 >>>

Q3 Earnings Seasons Scorecard

Including this morning's results from Deere & Co. (DE) and last evening's results from Gap (GPS), Nordstrom (JWN) and others, we now have seen Q3 results from 488 S&P 500 members. Total earnings for these companies are down -7.6% on -1% lower revenues, with 84.8% beating EPS estimates and 76.8% beating revenue estimates.

This is notably better performance relative to what we saw from this group of companies in the first three quarters of the year. The EPS and revenue beats percentages are the highest in recent years. Importantly, estimates for the current period (2020 Q4) have gone up since the quarter got underway, with the current -11.3% earnings decline up from -13.4% at the end of September.

For full year 2020, total S&P 500 earnings are expected to be down -17% on -4.1% lower revenues, with easy comparisons and upward revisions helping 2021 earnings growth reach +21.6%. This approximates to an index 'EPS' of $132.72 in 2020 and $161.39 in 2021. 

Tesla shares have practically been on fire lately, with the stock up 563.8% in the year-to-date period. Driving this momentum is a combination of first-mover advantage in the e-mobility space with high range vehicles, superior technology, and software edge.

Robust Model 3 demand, ramp up of Model Y production, Shanghai Gigafactory prospects, amazing line-up of upcoming products and aggressive expansion efforts bode well for the firm. Tesla’s S&P 500 inclusion news has further boosted investors' confidence. However, high R&D, SG&A costs and massive capex may clip the margins.

Tesla is investing heavily to boost production capacity and build gigafactories in Berlin and Austin, which are likely to strain its near-term prospects. Waning margins for Model S/X and lofty valuation of the firm are other concerns. Thus, investors are recommended to wait for a better entry point. 

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

Shares of JPMorgan have lost -6.3% over the past year against the Zacks Major Regional Banks industry’s loss of -18.1%. The Zacks analyst believes that branch openings in new regions, acquisition of InstaMed, strong mortgage banking business and focus on credit card operations are likely to continue supporting the bank's financials.

Further, despite restriction of capital deployments to conserve liquidity, the company’s cash position remains robust. However, the Federal Reserve’s accommodative policy and near-zero rates are expected to hurt the bank’s interest income and margins.

Also, coronavirus-induced economic downturn is likely to continue hampering business activities. Thus, loan demand will be muted in the near term.

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

Comcast shares have gained +32.5% over the past six months against the Zacks Cable Television industry’s rise of +26.4%. The Zacks analyst believes that Comcast is benefiting from solid high-speed Internet customer wins.

Its strategy to provide high-speed Internet at an affordable price plays a pivotal role in providing connectivity and improving customer experience. Moreover, coronavirus-led increased media consumption, and work-from-home and online-learning waves bode well for Comcast’s Internet business.

Moreover, its streaming service Peacock has gained significant tract within a short span of time and is a key catalyst in driving broadband sales. However, Comcast persistently suffers from video-subscriber attrition due to cord cutting. Theme park revenues are expected to suffer from indefinite closure of Hollywood park. Further, weakness in film business is also a headwind. Moreover, a leveraged balance sheet is a concern.

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

Other noteworthy reports we are featuring today include Thermo Fisher Scientific (TMO), Oracle (ORCL) and Boeing (BA).

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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

Tesla (TSLA) Rides on Rising Model 3/Y Deliveries

New Branches, Loan Balance Aid JPMorgan (JPM) Amid Low Rates

High Speed Internet Subscriber Gain Benefits Comcast (CMCSA)

Featured Reports

Robust Segmental Growth Aids Thermo Fisher (TMO) Amid Pandemic

The Zacks analyst is upbeat about the robust growth of Thermo Fisher's Life Sciences Solutions and Specialty Diagnostics arms amid the pandemic.

Oracle (ORCL) Gains from Strong Adoption of Cloud Solutions

Per the Zacks analyst, Oracle benefits from solid adoption of its cloud-based offerings including NetSuite ERP and Fusion ERP.

Strategic Mergers Aid Boeing (BA), Low 737 Deliveries Hurt

Per the Zacks analyst, strategic mergers made by Boeing, such as overtaking KLX, boosts growth. However, low 737 deliveries as a result of the worldwide grounding of 737 Max jets raises concerns.

LNG Focus, Strong Production Portfolio Aid TOTAL (TOT)

Per the Zacks analyst TOTAL's focus to develop LNG assets globally and its strong production growth through new startups is going to boost its performance.

Online Growth to Fuel TJX Companies (TJX), High Costs a Woe

Per the Zacks analyst, TJX Companies (TJX) is set to keep gaining from robust efforts to boost online sales.

Eylea, Dupixent Fuel Regeneron (REGN), Competition Worrisome

Per the Zacks analyst, label expansions of drugs like Eylea and Dupixent and uptake of Libtayo fuels Regeneron. Its efforts to develop its pipeline are positive but competition for Eylea is a concern.

Wide Market Reach & New Product Development, Aid Eaton (ETN)

Per the Zacks analyst, the development of new products through ongoing R&D investments will continue to drive demand and boost profitability for Eaton.

New Upgrades

Welltower's (WELL) Liquidity Aids, Earnings Dilution a Woe

Per the Zacks analyst, while large-scale dispositions will enhance Welltower's liquidity and de-lever its balance sheet, the dilutive impacts on near-term earnings from such asset sales are worrisome.

Robust Season Pass Program to Drive Vail Resorts (MTN)

Per the Zacks analyst, a strong season pass for the 2020/21 North American ski bode well for Vail Resorts. Notably, 850,000 passes for the upcoming North American ski season were sold through Sep 18.

Solid Demand Environment Aids A. O. Smith Corporation (AOS)

Per the Zacks analyst, strength in A. O. Smith's North America segment, driven by robust demand for water treatment and residential water heater products in the United States will lend momentum to it.

New Downgrades

Fortive (FTV) Battered by FX Volatility & Higher Expenses

The Zacks analyst believes that increasing fluctuations in foreign currency rates will continue to hurt Fortive. Also, higher expenses and end market cyclicality issues remain concerns.

Weaker Steel Prices to Weigh on Cleveland-Cliffs (CLF)

Per the Zacks analyst, weak U.S. steel prices, partly due to subdued demand, will hurt Cleveland-Cliffs' pellet price realization rate and dent its margins.

High Operating Expenses Ail Air Transport Services (ATSG)

Per the Zacks analyst, a surge in operating expenses due to a rise in costs on salaries, wages, and benefits are limiting the company's bottom-line growth.

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Tesla, Inc. (TSLA) : Free Stock Analysis Report
 
Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report
 
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Comcast Corporation (CMCSA) : Free Stock Analysis Report
 
The Boeing Company (BA) : Free Stock Analysis Report
 
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