Top Analyst Reports for Apple, Microsoft & General Electric

Thursday, May 2, 2019

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 Apple (AAPL), Microsoft (MSFT) and General Electric (GE). 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 >>>

Apple’s shares have gained +33.4% year to date and have outperformed the broader market with the S&P 500 increasing +15.8% over the same period. Apple’s second-quarter 2019 results were hurt by continued weakness in iPhone demand, particularly in China and emerging economies.

The Zacks analyst thinks the company continues to lose share in the smartphone market due to stiff competition from Chinese handset makers. Although Apple’s Services segment and newer products like Apple Watch hold promise, they are yet to deliver results strong enough to negate the decline in iPhone shipments.

However, iPhone demand is expected to improve in China, driven by lower VAT, and the company’s financing and trade-in programs. Moreover, price reductions are also expected to boost iPhone demand in certain emerging countries. Meanwhile, the Services segment is expected to grow strongly on solid App Store sales and increasing adoption of Apple Music and Apple Pay.

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

Shares of Buy-Ranked Microsoft have gained +36% in the past year, outperforming the Zacks Computer Software industry’s gain of +29.6% during the same period. Microsoft reported stellar third-quarter results. Robust execution and better-than-expected demand from customers for hybrid cloud offerings drove the quarterly results.

The Zacks analyst thinks Microsoft is benefiting from growing user base of its different applications like Office 365 commercial, Dynamics, Outlook mobile and Teams. Further, acquisitions like PlayFab and GitHub expand Microsoft’s TAM and penetration.

However, projections of a moderating growth rate in commercial cloud gross margin, and OEM Pro and Windows commercial businesses is a headwind. Also, competition is stiff and its dominant position in the PC market continues to be challenged.

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

General Electric’s shares have outperformed the Zacks Diversified Operations industry year to date (+33.5% vs. +23.9%). The Zacks analyst thinks the company is poised to become more competent on the back of the portfolio-restructuring program. In sync with this, it intends to focus on three core businesses — Power, Aviation and Renewable Energy — and gradually exit all others.

Also, reduced quarterly dividend rate and reorganization in the Power business are likely to benefit results going forward. In the first quarter of 2019, the company's earnings surpassed expectations but declined year over year due to weakness in revenues and margins.

In the quarters ahead, a weakening Power business remains a key cause of concern for the company. General Electric expects internal and external challenges to continue hurting this business arm. Also, headwinds related to unfavorable movements in foreign currencies are a concern.

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

Other noteworthy reports we are featuring today include Ecolab (ECL), Travelers Companies (TRV) and Celgene (CELG).

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>

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

Robust Services, iPad Aids Apple (AAPL) Amid iPhone Weakness

Adoption of Cloud & Office 365 Strength Aid Microsoft (MSFT)

Restructuring Moves to Aid GE, Power Segment Hurts

Featured Reports

Revlimid, Otezla Fuel Celgene (CELG) Amid Pipeline Setbacks

Per the Zacks analyst, Celgene's growth driver, Revlimid along with Otezla boost revenues. However, pipeline setbacks are a concern. The focus remains on the merger agreement with Bristol-Myers.

Global Industrial Arm Drives Ecolab (ECL) Amid Competition

Ecolab continues to gain from solid prospects of its core Global Industrial arm. The Zacks analyst is apprehensive about a highly competitive chemical speciality market.

BP plc (BP) Banks on Upstream Projects Amid Oil Spill Woes

The Zacks analyst thinks BP's strong portfolio of key upstream projects will support crude production growth.

High Retention Rate, Pricing Gains Aid Travelers (TRV)

Per the Zacks analyst, Travelers is set to grow on high retention rate, pricing gains, positive renewal rate changes.

Digital Moves Aid Fidelity (FIS), Intense Competition Hurts

Per Zacks analyst, Fidelity is well positioned to benefit from investments in mobile banking and innovative products such as PayNet and BuyWay.

Corning (GLW) to Benefit from Investments Amid Pricing Woes

Per the Zacks analyst, Corning is well positioned to benefit from its ongoing investments in product development and manufacturing capacity, despite decline in glass prices at Display Technologies.

Steady Investments, Growing Portfolio Aids DTE Energy (DTE)

Per the Zacks analyst, steady capital investments made in infrastructure projects and increasing focus on enhancing renewable generation assets will likely drive DTE Energy's future performance.

New Upgrades

Strong Climate Solutions Segment Boosts Ingersoll-Rand (IR)

Per the Zacks analyst, strong Climate Solutions segment driven by strength in commercial and residential HVAC markets and compression technologies business will lend momentum to Ingersoll-Rand.

Organic Prospects & Buyouts Aid IDEX (IEX), High Costs Ail

Per a Zacks analyst, IDEX is likely to gain from strengthening end markets, with organic sales likely to grow 4-5% year over year in 2019. However, high costs and forex woes remain concerns.

EMCOR (EME) Rides on Strong Construction Activity & Buyouts

Per the Zacks analyst, robust construction activity, mainly in non-residential markets, and accretive acquisitions will help EMCOR to drive profits.

New Downgrades

American Airlines (AAL) Stung by Boeing 737 MAX issues

The Zacks analyst is concerned about the loss of revenues at American Airlines due to the grounding of Boeing 737 MAX jets. Moreover, high fuel costs are hurting the bottom-line.

High Costs & Lack of Diversified Loans Hurt Huntington (HBAN)

Per the Zacks analyst, steadily increasing non-interest expenses and high exposure to commercial loan portfolios continue to keep Huntington's financials under pressure.

Weak Demand & Stiff Competition Hurt Finisar (FNSR)

Per the Zacks analyst, with increasing market competition, Finisar continues to struggle with weak demand and soft margins owing to higher promotional offers and discounts to woo customers.

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The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
 
Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
General Electric Company (GE) : Free Stock Analysis Report
 
Ecolab Inc. (ECL) : Free Stock Analysis Report
 
Celgene Corporation (CELG) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
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