Top Stock Reports for Wells Fargo, United Parcel Service & PayPal

Thursday, October 11, 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 Wells Fargo (WFC), United Parcel Service (UPS) and PayPal (PYPL). 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 >>>

Wells Fargo’s shares have underperformed the Zacks Major Banks industry over the past three months (-6.5% vs. -0.2%). But estimates have been stable lately ahead of the company’s Q3 earnings release. However, the company possesses a disappointing earnings surprise history, having beaten expectations in only one of the trailing four quarters.

Following its sales scandal and other issues, Wells Fargo has been slapped with new sanctions, including a cap on the assets position by the Federal Reserve. Also, the crisis related to the revelation of illegally opening millions of accounts in 2016, auto-lending issues and impact of other malpractices will take some time to alleviate.

Recently, the company’s chief financial officer, John Shrewsberry, revealed a dismal picture for the bank’s loan book as well. However, lower tax rate, easing of regulations and expansions will likely support the bank’s growth profile.

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

Shares of Buy-ranked United Parcel Service have outperformed the Zacks Air Freight and Cargo industry over the past six months, gaining +9.1% vs +1.2%. Solid e-commerce growth is a huge positive for the company and should aid its third-quarter results, scheduled to be disclosed on Oct 24.

Additionally, the company's transformation plan, unveiled in September 2018, is aimed at boosting its bottom line. The Zacks analyst is impressed by UPS' efforts to reward shareholders. To this end, in February 2018, UPS hiked quarterly dividends by 10%. UPS' bullish full-year forecast on free cash flow supports the possibility of a dividend hike in the near future.

Moreover, UPS is leaving no stone unturned to perform well in the upcoming holiday season. It intends to hire roughly 100,000 seasonal workers during the season. However, high operating expenses continue to limit bottom-line growth.

(You can read the full research report on United Parcel Service here >>>).

Buy-ranked PayPal’s shares have outperformed the Zacks Internet Software industry over the past year (+9.6% vs. +5.2%). PayPal continues to expand its customer base with the help of its robust Venmo, Choice and One Touch. Also, the company’s tie-up with MasterCard is aiding the adoption rate of Venmo.

Further, the company’s ongoing partnership with ShinhanCard remains positive for its presence in South Korea. Also, its extended partnership with Google and eBay will continue to strengthen its customer base further. This will keep adding strength to PayPal’s total payments volume.

The Zacks analyst thinks an expanding product & services portfolio and global presence will continue to benefit the company’s market share. However, continuous exposure to foreign exchange and interest rate risks are major concerns. Also, intensifying competition from major players in the finance and payment industry poses a risk to the company’s market position.

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

Other noteworthy reports we are featuring today include United Technologies (UTX), Northrop Grumman (NOC) and Morgan Stanley (MS).

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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

Rising Loans, Rates Aid Wells Fargo (WFC), Legal Issues Ail

Growing e-commerce Demand, Dividends & Buybacks Aid UPS

PayPal (PYPL) Benefits From Increasing Total Payment Volume

Featured Reports

Wealth Management Aids Morgan Stanley (MS), High Costs a Woe

Per the Zacks analyst, efforts to focus on wealth management operations and corporate lending will support Morgan Stanley, while rise in costs and muted debt underwriting will hurt profitability.

Dividends & Buybacks Aid Southwest (LUV) Amid Fuel Cost Woes

The Zacks analyst likes the company's efforts to reward shareholders through dividends & buybacks.

Cheniere Energy's (LNG) Gas Export Dominance Bodes Well

The Zacks analyst likes Cheniere's competitive advantage of being the first and dominant natural gas exporter in the U.S. market but is concerned over the huge debt load of nearly $27 billion.

Nasdaq (NDAQ) to Gain from Strategic Buyouts, Costs Ail

Per the Zacks analyst, prudent acquisitions, such as eVestment buyout, will continue to be accretive to Nasdaq's operational performance, resulting in overall growth.

Lithium Expansion, Rockwood Buyout Drive Albemarle (ALB)

The Zacks analyst thinks that Albemarle is well placed to gain from expansion actions in its lithium unit, strong growth in the battery-grade lithium market and synergies of Rockwood Holdings buyout.

Pricing Pressure Hampers Dr. Reddy's (RDY) Generics Strength

The Zacks analyst thinks that although Dr. Reddy's has a strong generics portfolio, ongoing pricing pressures and rising competition are concerns.

Revenue Growth Efforts Aid Waddell & Reed (WDR), Costs a Woe

Per the Zacks analyst, Waddell & Reed's efforts to invest in the Broker-Dealer channel will boost revenues.

New Upgrades

Solid Product Line, Buyouts to Aid United Technologies (UTX)

Per a Zacks analyst, United Technologies is poised to gain from its efforts at product innovation. Also, strategic buyouts will help in augmenting segmental businesses.

Strong Order Growth, New Product Launches Aids Textron (TXT)

Per the Zacks analyst, Textron witnesses strong order growth for both commercial and military product offerings. Launch of new innovative products will improve its growth trajectory and market share.

Defense Budget & Acquisition Strategy to Aid Northrop (NOC)

Per the Zacks analyst, Northrop Grumman's acquisition of Orbital ATK will bolster its growth trajectory. Also, the fiscal 2019 defense budget is expected to drive top line performance.

New Downgrades

Mounting Operating Costs Hamper Cohen & Steers (CNS) Growth

The Zacks analyst believes that continuous rise in operating expenses will likely hurt Cohen & Steers' bottom line growth to some extent. Also, high dependence on advisory revenues remains a concern.

Raw Material Cost Inflation, High Debt Ail Chemours (CC)

The Zacks analyst is concerned about Chemours' exposure to raw material cost inflation, which may hurt its margins. Its high debt level is another matter of concern.

Publishing Division a Worry for John Wiley & Sons (JW.A)

Per the Zacks analyst, John Wiley & Sons is troubled by its Publishing division, wherein sales fell 5% in first quarter. The unit is expected to remain pressurized this fiscal due to print declines.

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Wells Fargo & Company (WFC) : Free Stock Analysis Report
 
United Technologies Corporation (UTX) : Free Stock Analysis Report
 
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
 
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
 
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
 
Morgan Stanley (MS) : Free Stock Analysis Report
 
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