Top Analyst Reports for Citigroup, 3M & Walgreens Boots

Wednesday, October 4, 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 Citigroup (C), 3M (MMM) and Walgreens Boots (WBA). 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 >>>

Shares of Citigroup outperformed the Zacks Major Banks industry over the last six months, gaining +24.4% vs. +9.6%. This price performance is backed by impressive earnings surprise history. The company has surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters. The Zacks analyst believes that the company’s restructuring and streamlining efforts, strategic investments in core business and expense management, will likely support profitability, going forward.

Moreover, expansion of wealth management business in Australia will act as a tailwind. However, several issues including litigation burden keep us apprehensive.In spite of rising rates, margin is under pressure, due to persistent decline in the company’s legacy holdings portfolio. Notably, expected weak trading revenues on low volatility would be a major drag for profitability.

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

3M shares have gained +12.8% over the last six months, outperforming the Zacks Diversified Operations industry, which has declined -1.3% over the same period. 3M's global footprint, diversified product portfolio and the ability to penetrate in different markets have been its forte. The company is continuing with its portfolio restructuring efforts by divesting assets that no longer fit in its strategy and continues to make investments in other lucrative markets.

3M is standardizing its business processes through a new global ERP system for significant operational savings and has raised its guidance for 2017 on healthy growth dynamics. However, given its international presence, adverse foreign currency translations are likely to affect 3M’s ability to realize projected growth rates in sales and earnings.

Sustained strength in the U.S. dollar will negatively impact earnings, as exports consume a significant part of the operations. Increased pension expenses, commodity price risks and intense competitive pressure remain other headwinds.

(You can read the full research report on 3M here >>>).

Shares of Walgreens Boots have done better than the embattled Zacks Retail-Drug Stores industry over the last year (WBA is down -4.6% vs. decline of -9.5% for the peer group). The company finally gaining approval from the U.S. Federal Trade Commission (FTC) for the modified deal involving purchase of a number of Rite Aid (RAD) store buoys optimism.

Although investors did not show much optimism regarding the company’s purchase of fewer-than-expected stores, the Zacks analyst believes that the deal’s financial outcome is pretty attractive. Moreover, this modified merger contract is expected to extend Walgreens’ growth strategy and offer additional operational benefits.

The analyst is also upbeat about Walgreens’ ‘Next Chapter plan’ through fiscal 2017 focusing on a multi-faceted cost-reduction initiative across the enterprise. On the flip side, slowdown in generic introduction continues to weigh upon the company’s margins. Also, tough competitive landscapes along with currency fluctuations continue to pose threats for the company.

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

Other noteworthy reports we are featuring today include Lockheed Martin (LMT), ConocoPhillips (COP) and BCE (BCE).

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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

Focus on Core Operations Aid Citigroup (C), Legal Woe Linger

3M (MMM) Raises Guidance Despite Significant Dollar Strength

Walgreens (WBA) Up on Amended RAD Deal, Cost Cut Plan

Featured Reports

Teva Pharma (TEVA) Eyes Growth amid Weak U.S. Generics Unit

The Zacks analyst highlights that pricing erosion in the U.S. generics business is hurting Teva's top-line. Nonetheless, Teva is focusing on divestments to boost growth.

ConocoPhillips (COP) Banks on Eagle Ford Acreage, Debts High

Huge acreage holdings in the prospective Eagle Ford Shale play will contribute to ConocoPhillips' oil production, per the Zacks analyst.

Hartford (HIG) Improves Risk Profile, Personal Lines Hurt

Per the Zacks analyst, although Hartford's action plans to improve its risk profile strengthens its growth potential, softness in Personal Lines and Talcott Resolution segments keeps bothering.

Asset Growth to Support Invesco (IVZ), Higher Debt a Concern

Per the Zacks analyst, improving assets under management, inorganic growth strategy and efforts to lower expenses will keep Invesco well poised for growth.

Fiber-Optics Network Suite, MTS Buyout to Boost BCE (BCE)

The Zacks analyst is bullish about BCE's investment plans to boost its fiber-optics network suite. Manitoba Telecom Services' buyout should aid BCE's wireless segment.

LKQ Corp (LKQ) Rides on Organic Growth, Margin Woes Remain

Per the Zacks analyst, robust organic revenue growth in the parts & services segment is aiding LKQ Corp. However, a spate of acquisition in recent times has kept its gross margin under pressure.

Enterprise Technology to Drive Ubiquiti's (UBNT) Revenues

Per the Zacks analyst, impressive performance of Ubiquiti's Enterprise Technology business, fuelled by growing adoption of UniFi products, should drive the company's revenues in the quarters to come.

New Upgrades

KB Home (KBH) Rides on KB2020 Business Strategy

Per the Zacks analyst, KB Home has the right strategy, KB2020, to boost scale in existing geographic footprint, improve profitability per unit, generate higher operating margin and drive earnings.

SolidFire Buyout, Microsoft Partnership Drives NetApp (NTAP)

Per the Zacks analyst, NetApp is driving on product refreshes and growing portfolio based on SolidFire acquisition. Extended partnership with Microsoft also looks beneficial for the company.

BlackBerry (BBRY) Buoyed by Strong Software Sales

The Zacks analyst is impressed by its decision to focus exclusively on software business. Strong software sales is benefiting the company hugely. The Qualcomm dispute settlement is also a positive.

New Downgrades

F-35 Project's Escalated Cost Pose Threat for Lockheed (LMT)

Per the Zacks analyst, F-35 being the costliest U.S. weapon and representing a major portion of Lockheed Martin's revenues, any decision to cut its cost will hurt the company's growth trajectory.

Currency Headwinds to Hinder Clorox's (CLX) Growth

Per the Zacks analyst, Clorox remains prone to significant currency headwinds (mainly in Argentina) due to its international exposure. We expect this to continue hurting its sales in fiscal 2018.

Weak Nitrogen Pricing, High Debt Hurt CF Industries (CF)

Per the Zacks analyst, challenging nitrogen pricing environment will continue to hurt margins of CF Industries through 2017. Moreover, a debt-laden balance sheet is also concerning.

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Walgreens Boots Alliance, Inc. (WBA) : Free Stock Analysis Report
 
3M Company (MMM) : Free Stock Analysis Report
 
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
ConocoPhillips (COP) : Free Stock Analysis Report
 
Citigroup Inc. (C) : Free Stock Analysis Report
 
BCE, Inc. (BCE) : Free Stock Analysis Report
 
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