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The Zacks Analyst Blog Highlights: Caterpillar, Morgan Stanley, Walmart, Phillips 66 and Marriott

Xperi (XPER) delivered earnings and revenue surprises of 16.67% and 2.12%, respectively, for the quarter ended September 2018. Do the numbers hold clues to what lies ahead for the stock?

For Immediate Release

Chicago, IL –August 16, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Caterpillar CAT, Morgan Stanley MS, Walmart WMT, Phillips 66 PSX and Marriott International MAR.

Here are highlights from Wednesday’s Analyst Blog:

Top Research Reports for Caterpillar, Morgan Stanley & Walmart

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Caterpillar, Morgan Stanley and Walmart. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

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Buy-ranked Caterpillar’s shares have underperformed the Zacks Construction and Mining industry over the past year, gaining +18.8% vs. +19.6%. Backed by strong order rates, increasing backlog and positive economic indicators, Caterpillar guides adjusted EPS at $10.25-$11.25 for 2018, the mid-point of which reflects year-over-year rise of 56%. The construction segment will benefit from infrastructure development in China and continued improvement in North American residential, non-residential and infrastructure markets.

Rising commodity prices will drive Resource Industries and Energy & Transportation’s revenues. Cost cutting efforts and additional investments in expanded offerings and services will drive growth. The stock underperformed the industry over the past year. Its estimates have gone up lately. 

Shares of Morgan Stanley have lost -14.5% in the last six months, underperforming the Zacks Investment Banking industry, which lost -9.8% over the same period. Slowdown in debt underwriting will likely hurt the company's investment banking performance to some extent. Also, elevated expense levels are expected to hurt bottom line growth.

Yet, the company possesses an impressive earnings surprise history, beating the Zacks Consensus Estimate in each of the trailing four quarters. The company’s efforts to strengthen wealth management operations, focus on corporate lending and normalized levels of trading activities will continue to support revenues. Higher interest rates and tax cuts will likely lead to increased profitability.

Walmart’s shares have underperformed the Zacks Supermarkets industry over the past year (11.0% vs. 13.3%). The company is poised to gain from strong e-commerce initiatives, particularly expansion of online grocery delivery. This, along with efforts to drive brick-and-mortar sales should help the company maintain its sturdy U.S. comps trend. Walmart is also undertaking efforts to improve its International unit, by shifting focus from underperforming regions to profitable countries.

To this end, the company’s recent investment in Flipkart is however expected to dent the bottom line in the near term. Further, investments related to e-commerce initiatives and a compelling pricing strategy have been hurting Walmart’s gross margin – causing its shares to underperform the industry in the past six months.

Nonetheless, the Flipkart deal bodes well for the long term, which along with focus on buyouts, alliances and improved delivery services should help Walmart stand firm against Amazon. Estimates have been stable lately ahead of earnings.

Other noteworthy reports we are featuring today include Phillips 66 and Marriott International.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Morgan Stanley (MS) : Free Stock Analysis Report
 
Marriott International (MAR) : Free Stock Analysis Report
 
Caterpillar Inc. (CAT) : Free Stock Analysis Report
 
Phillips 66 (PSX) : Free Stock Analysis Report
 
Walmart Inc. (WMT) : Free Stock Analysis Report
 
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