Top Stock Reports for Morgan Stanley, Kraft Heinz & Lockheed Martin

Friday, December 29, 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 Morgan Stanley (MS), Kraft Heinz (KHC) and Lockheed Martin (LMT). 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 >>>

Morgan Stanley’s shares have outperformed the Zacks Investment Banking industry, over the last twelve months (+24.6% vs. +20.3%). The performance was supported by the company’s impressive earnings surprise history, having surpassed expectations in all the trailing four quarters.

The Zacks analyst likes the company’s efforts to lower balance sheet risk, strengthen wealth management operations and reduce costs (Project Streamline) and believes these initiatives will continue to support profitability. Given a solid capital position, it will likely enhance shareholder value through efficient capital deployment activities.

However, continued fall in net interest income despite rise in interest rates remains a matter of concern. Also, overall trading woes are expected to hurt the company’s bottom-line growth in the near term.

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

Shares of Kraft Heinz have declined -10.8% year to date, underperforming the Zacks Diversified Food industry which is down -4.7% during the same period, owing to continued softness in sales. However, Kraft Heinz’s cost savings have led to better profits amid a soft sales environment.

The company expects between $1.7 billion and $1.8 billion of cumulative Integration Program savings by the end of 2017, primarily focused on work-force reductions, factory closures and consolidations. Also, with growing awareness of the nutritional value of food products, the company is emphasizing on organic ingredients, reshaping its existing products and expanding into new categories.

However, the trend in current quarter and year earnings estimate revisions is not satisfactory as it has remained stable over the past 30 days.

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

Lockheed Martin’s shares have gained +28.9% over the past year, underperforming the Zacks Aerospace Defense sector, which has gained +45.3% over the same period. However, the Zacks analyst emphasizes that being the largest defense contractor in the world, Lockheed Martin witnesses strong demand for its high-end military equipment in both domestic as well as overseas markets.

Strong order growth has been a primary growth driver for this company. The latest $7 billion deal for the sustainment of F-22 air vehicle is one such order. An encouraging defense budget proposed by Trump government further buoys optimism for the stock's growth.

However, the F-35 program, despite being a prime defense project for the U.S. government, has been facing criticism for being overtly expensive for the past few years. Moreover, the company's limited commercial exposure and almost complete government dependence may prove fatal in maintaining its margins and bottom line.

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

Other noteworthy reports we are featuring today include Hershey’s (HSY), Waste Connections (WCN) and Discovery Financial (DFS).

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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

Cost Control Aids Morgan Stanley (MS), Trading Slump a Woe

Kraft Heinz (KHC) Fights Sales Slump With Cost-Saving Plans

Lockheed (LMT) to Gain from New Orders & Wide Customer Base

Featured Reports

Alkermes (ALKS) Boasts Strong Pipeline, Competition Looms

Per the Zacks analyst, Alkermes' strong product portfolio and pipeline progress have been impressive. However, the company is faced with competitive risks.

DTE Energy (DTE) to Gain from Investment in Infrastructure

The Zacks analyst believes DTE Energy will gain from its planned $18 billion capital investment aimed to strengthen its existing electric and natural gas infrastructure.

Bakken Pipeline Buoys Energy Transfer (ETP) Amid Debt Woes

While key projects like Bakken and Rover pipelines are expected to boost Energy Transfer's sales and DCF, the covering analyst is concerned about high leverage which might limit growth.

Unit Revenue Growth Aids Hawaiian (HA) Amid High Costs

The Zacks analyst appreciates the company's performance with respect to unit revenues. Its history with respect to punctuality is encouraging.

Engine Products' Momentum to Fuel Growth at Donaldson (DCI)

The Zacks analyst believes that robust Engine Products business powered by strong performance of Aftermarket business and acquisitions like Partmo & Hy-Pro will continue to lend momentum to Donaldson.

Cost Control & Strategic Acquisitions Aid BancorpSouth (BXS)

Per the Zacks analyst, BancorpSouth's efforts to drive operational efficiency through cost-control measures and strategic deals remain encouraging.

Banking Business Aids Discover Financial (DFS) , Debt Hurts

The Zacks analyst believes that, Discover Financial's solid card sales and strong banking business are boosting the top line.

New Upgrades

Loan Growth to Continue to Aid Prosperity Bancshares (PB)

Per the Zacks analyst, Prosperity Bancshares remains well positioned for top-line growth driven by continued rise in loan balances. Also, improving asset quality should support financials.

Abiomed (ABMD) Rides on Robust Demand for the Impella Line

The Zacks analyst believes that robust demand for the Impella product line will continue to drive Abiomed's top line. The company also launched Abiomed Impella Quality Program.

Hershey's (HSY) Cost Saving Initiatives to Drive Growth

The Zacks analyst thinks Hershey's cost cutting initiatives and productivity investments are effective hedges to a weak top-line performance.

New Downgrades

BJ's Restaurants' (BJRI) Margins Hurt by Rising Expenses

Per the Zacks analyst, higher costs related to sales initiatives and implementation of the Affordable Care Act are expected to keep BJ's Restaurants' margins under pressure.

Apogee (APOG) Challenged by High Costs, Stiff Competition

Per the Zacks analyst, higher health care costs in the Architectural Glass segment will hurt Apogee's results. It will also bear the brunt of strong competition in both large and mid-sized projects.

Oil Price Volatility Hurts Waste Connections (WCN)

Per the Zacks analyst, volatility in crude oil prices is expected to impair the profitability and creditworthiness of Waste Connections and affect investments and drilling in its operating basins.

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Waste Connections, Inc. (WCN) : Free Stock Analysis Report
 
Morgan Stanley (MS) : Free Stock Analysis Report
 
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
The Kraft Heinz Company (KHC) : Free Stock Analysis Report
 
Hershey Company (The) (HSY) : Free Stock Analysis Report
 
Discover Financial Services (DFS) : Free Stock Analysis Report
 
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