Top STock Analyst Reports for Microsoft, American Express & Others

Friday, January 17, 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 Microsoft (MSFT), American Express (AXP) and Fidelity National Information Services (FIS). 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 >>>

Microsoft’s shares have outperformed the S&P 500 over the past year (+54.3% vs. +23.3%) and the Zacks analyst expects this momentum continuing on the back of a growing user base of its different applications like Office 365 commercial, Dynamics, Outlook mobile and Teams.

Moreover, Azure’s expanding customer base is a key catalyst. Microsoft’s gaming segment is performing well, primarily driven by a combination of Xbox Live, Game Pass subscriptions and Mixer, which are driving user engagement. Further, acquisitions like PlayFab and GitHub expand Microsoft’s total addressable market (TAM) and penetration. Additionally, latest contract wins from the Department of Defense remain notable.

However, projections of a moderating growth rate in commercial cloud gross margin, and OEM Pro and Windows commercial businesses is a headwind. Moreover, stiff competition from the likes of Google, Apple, and Sony is a woe.

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

Shares of American Express have gained +11.8% in the past three months against the Zacks Financial Miscellaneous Services industry's rise of +9.1%. The Zacks analyst believes that its expanding presence in the business-to-business market and investment in technology should drive long-term growth.

Its revenue growth is driven by a strong brand, continued efforts toward building business in new growth verticals, shift toward digital, focus on initiatives and a strong economy, which are driving consumer spending. Its strong capital position and disciplined capital management by way of share buyback and dividend payouts are impressive.

However, the company's reward expenses have been increasing over the past many quarters, which weigh on margins. Cost of card member services has been increasing over the years, indicating higher engagement level across its premium travel services.

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

Fidelity National Information Services’shares have gained +11.3% over the past six months against the Financial Transaction Services industry's rise of +10%. The Zacks analyst believes that the company remains well positioned for growth backed by attractive core business with a recurring revenue model and several ongoing strategic initiatives.

Acquisition of Worldpay is likely to accelerate its growth by boosting presence in faster growing markets. Also, the deal will provide synergies of $700 million from revenue and cost savings over next three years. However, the company remains exposed to consolidation in the banking sector and significant competition from new entrants. Also, unsustainable capital deployment activities remain a concern.

(You can read the full research report on Fidelity National Information Services here >>>)

Other noteworthy reports we are featuring today include Apple (AAPL), Goldman Sachs (GS) and Southern (SO).

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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

Robust Adoption of Azure & Office 365 Aids Microsoft (MSFT)

American Express (AXP) Gains From Increased Billed Business

Acquisitions Support Fidelity (FIS) Amid Intense Competition

Featured Reports

Expanding Portfolio, Services Strength to Aid Apple (AAPL)

Per the Zacks analyst, expanding portfolio with the launch of new iPhones and Watch series 5 and Apple TV+ bodes well for Apple's prospects.

Business diversification Aids Goldman (GS), Legal Woes Linger

Per Zacks analyst, business diversification is a favorable factor for Goldman. However, legal issues linger.

Southern Company (SO) Buoyed by Regulated Customer Growth

The Zacks analyst believes that increase in Southern's regulated business customer base will support its revenue growth but is concerned over timing and cost overrun related to Vogtle project.

Dominion (D) Gains from Investment, Share Dilution a Concern

Per the Zacks analyst Dominion's plans to invest $26B to strengthen its infrastructure in the next five years will boost performance but share dilution could adversely impact its earnings.

Boston Scientific's (BSX) Rising Product Uptake Drives Growth

The Zacks analyst expects Boston Scientific to maintain its robust growth momentum across its structural heart and urology arms banking on strong rollout of WATCHMAN, ACURATE and LithoVue.

Growing Revenues Aid, High Debt Hurts Global Payments (GPN)

Per the Zacks analyst, Global Payments gains from its healthy revenue stream on the back of buyouts, alliances and electronic payment transactions.

Restructuring, Cost-Saving Efforts Support Barclays (BCS)

Per the Zacks analyst, Barclays' business simplifying and restructuring efforts will likely continue to help in improving efficiency.

New Upgrades

TC Energy (TRP) to Gain from C$30B Secured Growth Program

The Zacks analyst believes that TC Energy's C$30 billion of accretive growth projects should support the company's stated dividend growth commitment of 8-10% annually out to 2021.

Growing Demand for Live Programming Benefits Fox (FOXA)

Per the Zacks analyst, Fox is expected to gain traction from growing demand for live programming, which is relatively immune to growing competition from subscription-based video-on-demand services.

Navistar's (NAV) Next eMobility Solutions to Boost Prospects

Per the Zacks Analyst, with its new business unit, Next eMobility Solutions, Navistar will move towards an electrified future with plans to launch medium-duty electric trucks, going forward.

New Downgrades

Soft Margin at Segments Weigh on FEMSA's (FMX) Bottom Line

Per the Zacks analyst, FEMSA grapples with soft operating margins at FEMSA Comercio's Health and Proximity Divisions on operating expense deleverage. This is partly weighing on earnings performance.

Weak Demand, Higher Manufacturing Costs to Hurt DuPont (DD)

Per the Zacks analyst, soft demand across certain major end-markets such as automotive and semiconductor will hurt DuPont's organic sales. Higher manufacturing costs will also weigh on its margins.

End-Market Uncertainties to Hurt Altra Industrial (AIMC)

Per a Zacks analyst, Altra Industrial's (AIMC) performance will be hurt by difficult end-market conditions in 2019 and 2020. Also, global economy related woes are concerning.

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Southern Company (The) (SO) : Free Stock Analysis Report

Microsoft Corporation (MSFT) : Free Stock Analysis Report

The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report

Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report

American Express Company (AXP) : Free Stock Analysis Report

Apple Inc. (AAPL) : Free Stock Analysis Report

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