Top Analyst Reports for Amazon, Visa & BHP Billiton

Wednesday, April 4, 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 Amazon (AMZN), Visa (V) and BHP Billiton (BHP). 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 >>>

Strong Buy-rated Amazon’s shares have outperformed the broader market in the last year (the stock is up +53.1% vs. the +11.3% gain for the S&P 500 as a whole). Amazon’s expanding AWS enterprise customer base is driving top-line growth. Its increasing number of paid Prime members is positive.

The Zacks analyst thinks the company is benefiting from strong growth in the retail business, which remains very hard to beat on price, choice and convenience. Amazon has a solid loyalty system in Prime and its FBA strategy and content addition continue to add selection to Prime memberships.

AWS generates much higher margins than retail, thus significantly impacting Amazon’s profitability. However, increased operating expenses to support expansion of its business into new markets and territories, localize the availability of products and grow its content will keep margins under pressure.

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

Shares of Buy-rated Visa have outperformed the Zacks Financial Transaction Services industry over the last one year (+33.9% vs. +32.8%). The Zacks analyst likes the company's key business drivers, payments volume, cross model volume and process transactions, which have remained strong and stable across the globe.

Numerous strategic acquisitions and alliances, technology upgrades and effective marketing have paved the way for its long-term growth that have led to consistent revenue growth over the past several years. Visa is well poised to gain from the growing electronic payment processing and strong international business.

A solid balance sheet ensures effective capital deployment. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 1.1% upward over the last 60 days. Nevertheless, high client incentives, forex volatility are some of the headwinds.

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

BHP Billiton’s shares have outperformed the Zacks Mining-Miscellaneous industry over the last three months (+7% vs. +4.1%). Declining iron-ore prices will likely weigh over the company’s revenues and profitability in the near term. Headwinds like stiff industry rivalry or a supply glut in the market remain other causes of concern.

However, the Zacks analyst thinks the company has been boosting its competency on the back of sturdier productivity gains. Moreover, BHP Billiton is deleveraging its balance sheet with increased free cash flow generation.

The company also remains on track to provide increased returns to shareholders. Over the last 30 days, the Zacks Consensus Estimate for the stock remained unchanged for fiscal 2018 and 2019.

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

Other noteworthy reports we are featuring today include NextEra (NEE), Mondelez (MDLZ) and Alibaba (BABA).

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>

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

France & Brazil Expansion, Prime Strength Aids Amazon (AMZN)

Visa (V) Gains from Continuous Investment in Technology

BHP Billiton (BHP) Braves Headwinds With Higher Mining Yield

Featured Reports

EOG Resources (EOG) to Gain from Oil Rich Eagle Ford Holding

The Zacks analyst opines that the huge inventory of premium drilling wells in the oil rich Eagle Ford shale play will contribute to EOG Resources' oil production.

HDPE Project, A. Schulman Buyout Drive LyondellBasell (LYB)

The Zacks analyst thinks that LyondellBasell's HDPE project will boost its annual production capacity and improve margins.

Segmental Growth to Aid Cosan (CZZ), Costs Remain An Issue

Per a Zacks analyst, Cosan's business units, including Raizen Energia and Combustiveis, Comgas, Moove, Rumo, have solid growth prospects.

POSCO (PKX) Gains from Restructuring Efforts, Debt Drags

Per a Zacks analyst, POSCO's business restructuring initiatives will be beneficial going forward.

Alibaba (BABA) Drives On New Investments & Cloud Growth

Per the Zacks analyst, Alibaba continues to benefit from its strong core e-commerce business, Ele.me acquisition, new investments in Asia, international growth and growing cloud computing services.

Solid Uptake of InviSalign Aids Align Technology (ALGN)

The Zacks analyst is bullish on Align Technology's strong InvisAlign growth prospects in North America and internationally, particularly the Asia-Pacific region where China remains a major market.

Automatic Data Processing (ADP) Grapples With Low Retention

The Zacks analyst believes that migration from legacy business has been weighing on Automatic Data Processing's retention rate.

New Upgrades

Investments, Renewable Asset Focus to Drive NextEra (NEE)

Per the Zacks analyst, NextEra Energy's plans to invest $40 to $44B to strengthen existing infrastructure and add 10,100 to 16,500 MW alternate power generation by 2020 will aid its performance.

Johnson Controls (JCI) to Gain from Smartvue Acquisition

Per the Zacks analyst, Smartvue acquisition will help Johnson Controls to offer cloud-based video surveillance solutions in a secured way. This will in turn bolster its Building Technology segment.

Expanding Portfolio, End-market Strength Drives Agilent (A)

Per the Zacks analyst, Agilent's expanding product portfolio, end-market strength and robust performance in China and Europe are key growth drivers.

New Downgrades

Higher Costs, Concentration Risk Hurt Raymond James (RJF)

Per the Zacks analyst, elevated expenses mainly due to higher compensation costs are expected to hurt Raymond James' bottom-line. Also, major dependence on U.S. revenue sources remains a weakness.

Rising Benefit Expenses Weigh on Cigna's (CI) Bottom Line

Per the Zacks analyst, surging benefit expenses lead to continuous rise in Cigna's total expenses at a rate higher than the growth in revenues. Rise in total expenses put pressure on the margins.

Weak Volume Trend Weigh on Mondelez's (MDLZ) Performance

The covering analyst stresses that Mondelez's volume trends have remained weak for quite some time now due to higher pricing and lower demand.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Visa Inc. (V) : Free Stock Analysis Report
 
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
 
Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report
 
BHP Billiton Limited (BHP) : Free Stock Analysis Report
 
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research