Top Stock Reports for Alphabet, General Electric & Morgan Stanley

Tuesday, July 24, 2018

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 Alphabet (GOOGL), General Electric (GE) and Morgan Stanley (MS). 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 >>>

Alphabet’s shares have outperformed the Zacks Internet Services industry in the last year (the stock is up +25% vs. a +7.6% increase for the industry). Alphabet delivered strong second-quarter earnings on robust mobile growth, strong network advertising revenues, cloud, hardware and Play revenues.

The Zacks analyst likes the company's focus on innovation, AI, cloud, home automation space, strategic acquisitions and Android OS. These initiatives should continue to aid its top-line growth. Further, its partnership with PayPal remains positive. Also, the company has shown good execution to date, more or less maintaining its dominant share in a competitive, fast-growing search market.

However, Alphabet suffers from litigation issues which might hurt its profitability. Moreover, it's increased spending on its consumer gadgets, YouTube video app and cloud computing services remain concerns. In addition, rising competition in the online advertisement market poses serious risk to the company's position.

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

Shares of General Electric have underperformed the S&P 500 index in the year-to-date period (-25.5% vs. +5.4%). General Electric had decided to restructure its business portfolio to evolve into a high-tech industrial company — focused on Aviation, Power and Renewable Energy. As a result, the company will gradually separate GE Healthcare into a stand-alone company and exit oil and gas businesses by disposing its 62.5% stake in Baker Hughes.

As planned earlier, GE Transportation will be divested to Wabtec Corp. and efforts are on track to shrink exposure in GE Capital business. The Zacks analyst thinks that when accomplished, these actions will help in improving shareholder value.

As for now, the company beat earnings and sales estimates in second quarter 2018. However, earnings fell 10% year over year on weakness in margins. For 2018, momentum will be strong for Aviation and Healthcare segments, while Power will continue to remain a drag.

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

Buy-ranked Morgan Stanley’s shares have underperformed the Zacks Investment Banking industry over the last six months (-10.7% vs. -6.9%). Also, the company possesses an impressive earnings surprise history, beating expectations in each of the trailing four quarters. Its second quarter 2018 results reflect better-than-expected trading and decent investment banking performances.

The Zacks analyst likes the company’s efforts to strengthen wealth management operations, focus on corporate lending and normalized levels of trading activities, which will continue to support revenues. While slowdown in debt underwriting and elevated expense levels are expected to hurt growth, higher interest rates and tax cuts will likely lead to increased profitability. Further, capital deployment activities reflect strong balance sheet position.

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

Other noteworthy reports we are featuring today include Capital One (COF), KeyCorp (KEY) and Manulife (MFC).

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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

Alphabet (GOOGL) Rides on Diversification; Risks Remain

Aviation and Healthcare Units to Aid General Electric (GE)

Wealth Management Focus, Trading Support Morgan Stanley (MS)

Featured Reports

North Star Initiatives Aid Fifth Third (FITB), High Cost Ails

Per the Zacks analyst, Fifth Third's strategic initiatives will support revenues, cut costs and optimize balance sheet position. Yet, rising costs due to investment in technology remains a headwind.

Strong Pellet Demand, Debt Cuts to Aid Cleveland-Cliffs (CLF)

Per the Zacks analyst, Cleveland-Cliffs should gain from efforts to de-leverage its balance sheet. Strong demand for pellets in the United States should also lend support to its earnings.

Product Sales Drive Badger Meter (BMI), Pension Costs Ail

Per the Zacks analyst, growing demand for E-Series Ultrasonic water meters and ORION Cellular endpoint remain tailwinds for Badger Meter.

Pricing Initiatives & Acquisitions to Assist Sonoco (SON)

Per the Zacks analyst, Sonoco will gain from its pricing initiatives aimed at combating inflation. Also, the acquisitions of Highland Packaging and Clear Lam will boost top line.

Credit Card Business & Acquisitions Aid Capital One (COF)

Per the Zacks analyst, focus on credit card business in the ongoing era of digitization should bolster Capital One's revenues. Moreover, acquisitions spree is a tailwind.

Loan Growth and Higher Rates Aid KeyCorp's (KEY) Revenues

Per the Zacks analyst, KeyCorp remains well poised for revenue growth, driven by continued improvement in loans and higher interest rates.

Popularity Among Teenagers & New Features Aid SNAP (SNAP)

Launch of innovative features is anticipated to keep the interest of users alive.

New Upgrades

Ultragenyx's (RARE) Rare Disease Drugs Hold Potential

The Zacks analyst likes Ultragenyx's two marketed drugs -Crysvita and Mepsevii which hold strong potential. The company also has an impressive rare disease and gene therapy pipeline.

New CMS Guidance, FDA Nod Aids Insulet Corporation (PODD)

The Zacks analyst is bullish about CMS' new guidance for Omnipod to be covered under the Medicare Part D prescription drug benefit program. Also, the FDA nod for the Omnipod DASH IMS buoys optimism.

Best Buy's (BBY) 2020 Strategy to Lift Sales & Optimize Costs

Per the Zacks analyst, Best Buy's 2020: Building the New Blue strategy, focused on developing multi-channel retail business and cost optimization will continue to fuel results in the coming quarters.

New Downgrades

Soft Results in Canada, U.S. Division Drags Manulife (MFC)

Per the Zacks analyst, Manulife's results are weighed down by declining group benefit sales in Canada segment and lower sales and less favorable policyholder experience in U.S. division.

Rising Raw Material & Labor Costs Mar NVR's (NVR) Prospects

Rising raw material and labor costs may dampen NVR's growth prospects. Again, high mortgage rates may dilute the demand for new homes, per the Zacks analyst.

Broadband Subscriber Loss & High Debt Hurt CenturyLink (CTL)

Per the analyst, CenturyLink is struggling with declining access lines as well as broadband subscriber losses. Also, high debt level is putting pressure on the company's operating margin.

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Morgan Stanley (MS) : Free Stock Analysis Report
 
Manulife Financial Corp (MFC) : Free Stock Analysis Report
 
KeyCorp (KEY) : Free Stock Analysis Report
 
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
 
General Electric Company (GE) : Free Stock Analysis Report
 
Capital One Financial Corporation (COF) : Free Stock Analysis Report
 
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