Top Stock Reports for Chevron, U.S. Bancorp & Kraft Heinz

Thursday, September 6, 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 Chevron (CVX), U.S. Bancorp (USB) and Kraft Heinz (KHC). 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 >>>

Chevron’s shares have risen +6.3% in the past year, underperforming the Zacks Integrated Oil industry's +10.9% increase, while shares of larger rival Exxon Mobil have gained a meager +2.9% over the same time period. Shares of Chevron are up nearly 100% off its August 2015 lows and poised for further capital appreciation, riding on its healthy earnings growth prospects.

The Zacks analyst thinks the ‘oilier’ nature of the company’s volume mix positions it to benefit from strengthening oil prices in its upstream business with fewer encumbrances from its smaller downstream unit. Chevron’s existing oil and gas development project pipeline is among the best in the industry, targeting volume growth of 4-7% in 2018.

Chevron also improved its cash from operations, allowing management to raise the dividend and announce a $3 billion per year share buyback program recently. However, there are worries over drop in its downstream segment earnings on weaker margins, while exposure to production in the vulnerable and violence-prone regions in Nigeria poses additional risk. Hence, investors should wait for a better entry point before buying shares in Chevron.

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

Shares of U.S. Bancorp have outperformed the Zacks Major Banks industry over the past three months, gaining +4.8% vs +2.4%. The company possesses an impressive earnings surprise history, beating expectations in three out of the trailing four quarters.

The Zacks analyst thinks U.S. Bancorp's prospects will likely get support from its solid business model, core franchise, lower tax rate, rising interest rate and diverse revenue streams. Also, its organic growth remains solid and will likely benefit from the improving economic scenario.

Nevertheless, escalating expenses due to its ongoing investments in technology remains a key concern. Also, involvement in legal hassles is likely to increase legal expenses and provisions in the near term.

(You can read the full research report on U.S. Bancorp here >>>).

Kraft Heinz’s shares have declined -15.5% over the past six months, underperforming the Zacks Diversified Food industry which is down -1.5% over the same period. Kraft Heinz has solid innovation initiatives planned in the foodservice space to fuel growth across all regions, while it is also making innovation efforts in its growing e-commerce channel.

Further, improvements in EMEA and ROW regions, buoyed by gains in condiments and sauces, helped the company post sales growth in the second quarter of 2018, which was otherwise hurt by soft U.S. sales and hurdles related to input cost inflation. In fact, Kraft Heinz’s U.S. sales have been declining for more than a year now, with lower cheese shipments being a concern in many quarters.

Coming back to the second quarter, high freight and resin expenses led to a rise in input costs, thereby hurting the adjusted EBITDA. Management expects cost inflation to remain a pressure on EBITDA in the near term.

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

Other noteworthy reports we are featuring today include Interactive Brokers (IBKR), General Mills (GIS) and Workday (WDAY).

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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

Chevron (CVX) Buoyed by Cash Flow Amid Downstream Woes

Loan Growth Supports U.S. Bancorp (USB), Higher Costs a Woe

EMEA & ROW Regions to Drive Kraft Heinz's (KHC) Top Line

Featured Reports

Acquisition to Aid SunPower (SPWR), Rising Costs to Hurt

Per the Zacks analyst, SunPower's decision to buy SolarWorld Americas will expand its footprint in the United States.

Ocean Rig Buyout to Aid Transocean (RIG) Amid Low Dayrates

While the Ocean Rig acquisition will provide Transocean an unparalleled drilling fleet and backlog, the Zacks analyst is concerned about falling dayrates, which are affecting the firm's margins.

Commercialization Strategy Aids Cosan (CZZ), Rising Costs Ail

Per the Zacks analyst, Cosan will gain from focus on commercialization strategy including investment in maintenance and renewal of existing contracts.

Fekola Mine Buoys B2Gold (BTG), Unrest in Nicaragua a Worry

Per the Zacks analyst, better-than expected performance of B2Gold's new low-cost Fekola mine will help counter the impact of the political strife in Nicaragua on the La Libertad and El Limon Mines.

Workday (WDAY) Rides on HCM Capabilities & Cloud Platforms

Per the Zacks analyst, Workday's revenue growth continues to be driven by high demand for its HCM and financial management solutions.

Key Global Strategies to Drive General Mills' (GIS) Sales

Per the Zacks analyst, sales are set to gain from increasing focus on cereals business and restructuring U.S. Yogurt business through innovations.

Focus on Hospitality, New Galleries To Boost RH's (RH) Sales

Per the Zacks analyst, new initiatives across the gallery openings, the expansion in hospitality and the extension of the RH brand are expected to boost growth.

New Upgrades

Yelp (YELP) Gains From Grubhub Collaboration, Ad Revenues

Yelp is gaining from its alliance with Grubhub by providing access to a large number of restaurants on the platform. Also, growth in paid advertiser accounts is a tailwind, per the Zacks analyst.

Fleet Upgrade, Dividends & Buybacks Buoy GATX Corp. (GATX)

The Zacks analyst appreciates the company's efforts to reward shareholders through dividends & buybacks. Efforts to modernize its fleet also raise optimism in the stock.

Higher Nitrogen Demand & Pricing Drive CF Industries (CF)

The Zacks analyst believes that CF Industries is well positioned to benefit from higher nitrogen demand in major markets in 2018. Higher nitrogen prices should also drive its sales and margins.

New Downgrades

Nokia (NOK) Hurt by Dismal Networks Business and Forex Woes

Per the Zacks analyst, lower-than-expected performance in Networks business due to soft market conditions mainly in North America and adverse foreign currency movement remain headwinds for Nokia.

Ambarella (AMBA) Hurt By Weak Drone Demand, Low GoPro Deals

Per the Zacks analyst, Ambarella's top-line is being adversely impacted by low demand for drones and insignificant business from GoPro, its second largest customer.

High IBG LLC Dependence to Hurt Interactive Brokers (IBKR)

Per the Zacks analyst, Interactive Brokers' high dependence on IBG LLC remains a major concern because if it fails to provide funds for taxes, the company's financial condition might suffer.

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Workday, Inc. (WDAY) : Free Stock Analysis Report
 
U.S. Bancorp (USB) : Free Stock Analysis Report
 
The Kraft Heinz Company (KHC) : Free Stock Analysis Report
 
Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
 
General Mills, Inc. (GIS) : Free Stock Analysis Report
 
Chevron Corporation (CVX) : Free Stock Analysis Report
 
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