Top Stock Reports for Facebook, UPS & PepsiCo

Tuesday, December 12, 2017

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 Facebook (FB), UPS (UPS) and PepsiCo (PEP). 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 >>>

Facebook’s shares have outperformed the S&P 500 index over the past year, gaining +48.8% vs. +17.3%. Facebook's efforts in mobile and live videos continue to pay off in a big way. Instagram remains another important revenue stream. Apart from mobile and video, the monetization opportunities of the company’s other subsidiaries – Messenger, WhatsApp and Oculus – and a huge user base/higher engagement levels are expected to drive growth going ahead.

Facebook is also dabbling in AR/VR and AI technologies, which bodes well for long-term growth. However, the recent uproar caused by apparent use of the platform by Russian elements for interfering in the presidential elections has put Facebook in a spot. As a result, Facebook CEO has said that it will make sizable investments to tighten security on the platform, which, along with continued investments in video, AR/VR and AI, will dent operating margins going forward.

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

Shares of UPS have underperformed the Zacks Air Freight and Cargo industry as well as rival FedEx on a year-to-date basis. While UPS has gained +2.9% of its value, the industry it belongs to and FedEx have rallied +11.6% and +28.1%, respectively, in the same period.

Moreover, the ongoing holiday season might prove to be a dampener for UPS due to the unprecedented surge in demand. Order volumes have surged courtesy the rapid e-commerce growth. UPS, however, is also leaving no stone unturned to meet the demand increase.

Despite its efforts, high delivery costs might hurt the company’s fourth-quarter results. However, the Zacks analyst is encouraged by the company’s efforts to reward shareholders through buybacks and dividend payments. The company's efforts to expand globally also raise optimism in the stock.

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

PepsiCo’s shares have gained +12.2% year to date, underperforming the Zacks Soft Beverages industry, which has increased +13.9% over the same period. PepsiCo has been doing well on the back of significant innovation, continued momentum in Frito-Lay business, revenue management strategies, improved productivity and cost-saving initiatives, along with better market execution.

An improving economy, better industry pricing dynamics and consistency in positive innovation bode well. It rolled out several products recently which management believes will drive sales and profits in 2017. That said, growing health awareness has been hurting the CSD category, resulting in a 4% volume decline in the first nine months of 2017 in North America. Again, rising volatility in global markets and increasing currency headwinds may dampen growth.

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

Other noteworthy reports we are featuring today include AT&T (T), Costco (COST) and NextEra (NEE).

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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

Facebook (FB) Drives on Increasing Live Video Initiatives

Dividends & Buybacks Buoy UPS, High Costs Hurt

PepsiCo (PEP) to Gain From Innovation & Productivity Plans

Featured Reports

Delta (DAL) Buoyed by Unit Revenue Growth, High Costs Ail

The Zacks analyst likes Delta's performance with respect to unit revenues. Efforts to reward shareholders are also encouraging.

RenaissanceRe's (RNR) Premium Grows, Rising Debt Level Hurts

Per the Zacks analyst, although RenaissanceRe's top line grows on premiums, continuously rising level of debt weighs on the company's bottom line.

Strong Class 8 Lineup & Cost Savings Aid Navistar (NAV)

Per the Zacks analyst, Navistar is gaining from new products & improved Class 8 lineup. Also, cost-saving initiatives like engine restructuring and reductions in discretionary spending are aiding the

International Paper (IP) to Trim Costs to Improve Margins

Per the Zacks analyst, International Paper intends to invest $300 million through 2017 to improve product quality and reduce costs to counter volatility in raw material prices and pension headwinds.

Costco's (COST) Sturdy Comps, Price Management to Fuel Sales

Costco boasts impressive comparable sales run. Per the Zacks analyst, better price management and operational efforts should fuel sales.

Higher Inflows Aid Blackstone's (BX) AUM, Dividend A Concern

Per the Zacks analyst, higher net inflows should continue to aid Blackstone's assets under management growth.

Valeant (VRX) Upbeat on Drugs Approval, Dermatology Weak

New drug approvals are also expected to boost growth for Valeant and offset the weakness in the dermatology segment.

New Upgrades

NextEra (NEE) Gains From Clean Energy Focus, Customer Growth

The Zacks analyst believes investments made by NextEra to strengthen its clean energy portfolio and consistent rise in customer count is going to boost its performance.

da Vinci X Robotic Platform Boosts Intuitive Surgical (ISRG)

The Zacks analyst believes Intuitive Surgical has been gaining significantly on the CE Mark and FDA approval for da Vinci X Robotic Platform. The company is spending on product development of late.

Southern (SO) Buoyed by Speedy Loan Guarantee for Vogtle

The Zacks analyst believes that the agreement to receive guaranteed payments worth $3.2 billion for the Vogtle nuclear plant by Dec 15 will help Southern Company reduce its financing costs.

New Downgrades

Spot Market Risks Continue to Hit American Electric (AEP)

Per the Zacks analyst since American Electric Power enters into contracts to sell power in the spot market, it faces the risk of volatile market prices, which could affect its margins and revenues.

Wireless Competition, Regulatory Issues Weigh on AT&T (T)

The Zacks Analyst is pessimistic about AT&T's struggle in the competitive U.S. wireless market. Regulatory norms and threat from online video streaming service providers are others risks.

Lennar's (LEN) Gross Margin Suffers From Rising Land Costs

The Zacks analyst believes labor shortage along with rising land and labor costs pose a threat to the company's margins.

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United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
 
AT&T Inc. (T) : Free Stock Analysis Report
 
Pepsico, Inc. (PEP) : Free Stock Analysis Report
 
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
 
Facebook, Inc. (FB) : Free Stock Analysis Report
 
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
 
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