Top Analyst Reports for Caterpillar, Netflix & Philip Morris

Thursday, February 14, 2019

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 Caterpillar (CAT), Netflix (NFLX) and Philip Morris International (PM). 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 >>>

Caterpillar’s shares have outperformed the Zacks Construction and Mining industry in the last six months (0.9% vs. -0.4%). Caterpillar’s fourth-quarter adjusted earnings per share (EPS) and revenues improved on a year-over-year basis driven by continued strength in many of its end markets and incessant focus on cost control. However, it missed the Zacks Consensus Estimate on both counts. 

For 2019, the company anticipates EPS to be $11.75-$12.75, projecting year-over-year growth of 5-14%. Material cost inflation due to the impact of tariffs and increased transportation costs will affect the company's margins. Further, the slowdown in China remains a concern.

Nevertheless, improving demand across most of its other markets, pricing actions and cost cutting efforts will aid results. Additional investments in expanded offerings and services, and digital initiatives like e-commerce will also drive growth.

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

Shares of Netflix have gained +25.5% over the past year, outperforming the Zacks Broadcast Radio and Television industry’s gain of 6.1% during the same period. Netflix is benefiting from an increasing subscriber base, which is primarily driven by a solid content portfolio. The company will reportedly stream the much-anticipated Breaking Bad movie, before AMC, which reflects growing appeal of the streaming platform.

This is also helping Netflix counter competition from the likes of Hulu, HBO, Amazon Prime video and YouTube. Moreover, partnerships with telcos like Telefonica in Spain, KDDI in Japan, Comcast and T-Mobile in the United States, and Sky in the U.K. and Germany are expected to drive subscriber addition. Notably, Netflix’s decision to raise prices is likely to boost top-line growth and offset increasing marketing expenditure. 

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

Buy-ranked Philip Morris’ shares have lost -5.2% in the last three months, outperforming the Zacks Tobacco industry's decline of -6.6%. The company is gaining from strong pricing strategies. In fact, favorable pricing has played an important role in boosting revenues for a while. Also, this drove the company’s performance in the fourth quarter of 2018, wherein it delivered the third and the fourth straight quarter of top- and bottom-line surprises, respectively.

The company is also undertaking initiatives to strengthen RRPs, which are rapidly gaining market popularity. In fact, it has introduced new versions of IQOS to capture market share. Additionally, the company provided favorable view for 2019. 

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

Other noteworthy reports we are featuring today include Southern Company (SO), Altria (MO) and Verizon (VZ).

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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

Favorable Markets Buoy Caterpillar (CAT) Amid Rising Costs

Robust Content to Aid Netflix (NFLX) Amid Stiff Competition

Cigarette Pricing to Continue Aiding Philip Morris (PM)

Featured Reports

Southern Company (SO) Buoyed by AGL Resources Buyout

The Zacks analyst is optimistic of the AGL buyout, which has expanded the customer base of Southern Company.

Rising Loans, Cost Control Aid New York Community (NYCB)

Per the Zacks analyst, New York Community will continue to gain from increasing loans balance amid the improving economy.

U.S. Dialysis Revenues Aid DaVita (DVA), Other Business Ails

DaVita's dialysis services in the United States see lucrative prospects. The Zacks Analyst is apprehensive about DaVita's Other segment which has been witnessing softness in recent times.

Snap-on's (SNA) Commercial & Industrial Group to Aid Growth

Per the Zacks analyst, Snap-on is witnessing strength in its Commercial & Industrial Group, which is likely to continue.

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

Per the Zacks analyst, Altria steadily gains from higher pricing and rising consumer demand in Smokeless category.

Verizon (VZ) Rides on Wireless Traction Despite Spectrum Woes

Per the Zacks analyst, Verizon is poised to benefit from commercial 5G smartphone launch, online content delivery, and online advertising despite a competitive and saturated U.S. wireless market.

New Products Aid Textron (TXT), Higher Leverage May Hurt

Per the Zacks Analyst, Textron's new product launch will significantly expand its shares in the all-terrain vehicles (ATVs) industry.

New Upgrades

Inorganic Growth, Rising Top-line Aid Ensign Group (ENSG)

Per the Zacks Analyst, a number of buyouts such as Alpha Nursing, and Cornerstone Home Health and Hospice have led to significant top-line growth, which in turn has aided its margins.

Ubiquiti (UBNT) Rides on Solid Enterprise Technology Business

Per the Zacks analyst, growth in global Enterprise Technology business due to solid market traction of UniFi products, including switches and security gateways, should enhance Ubiquiti's top line.

Long-Term Investments, Renewable Focus Aid Xcel Energy (XEL)

Per the Zacks analyst, disciplined investments in infrastructure projects and focus on renewable expansion will strengthen Xcel Energy's existing operations.

New Downgrades

Seattle Genetics (SGEN) Dependence on Adcetris Is a Concern

Per the Zacks Analyst, although Adcetris has done well since launch, Seattle Genetics' dependence on the drug for revenues could severely impact its prospect, given the competition in the lymphoma mar

Verisk (VRSK) Grapples With Debt Burden, Investments Hurt

The Zacks Analyst believes that debt-funded buyouts and higher investments in software development have increased Verisk's financial burden.

Rising Material & Freight Costs to Hurt Armstrong World (AWI)

Per the Zacks analyst, higher freight and raw material costs have been impacting Armstrong World's operating profits.

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Verizon Communications Inc. (VZ) : Free Stock Analysis Report
 
Southern Company (The) (SO) : Free Stock Analysis Report
 
Philip Morris International Inc. (PM) : Free Stock Analysis Report
 
Netflix, Inc. (NFLX) : Free Stock Analysis Report
 
Altria Group, Inc. (MO) : Free Stock Analysis Report
 
Caterpillar Inc. (CAT) : Free Stock Analysis Report
 
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