Top Analyst Reports for AT&T, Disney & PepsiCo

Tuesday, June 9, 2020

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 AT&T (T), Disney (DIS) and PepsiCo (PEP). 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 >>>

AT&T’s shares have underperformed the Zacks Wireless National industry over the past year (+4% vs. +7.4%), but the Zacks analyst sees the company as well positioned to benefit from streaming services like AT&T TV and HBO Max. The company is committed to three-year financial framework with sustained investments and debt-reduction efforts.

AT&T is witnessing a steady decline in linear TV subscribers and legacy services. Its wireline division is also facing loss in access line due to competitive pressure from VoIP service providers. As it tries to woo customers with discounts, freebies and cash credits, margins tend to fall. The company cancelled its stock buyback program due to the severity of the virus outbreak and withdrew guidance.

AT&T intends to deploy a standards-based, nationwide mobile 5G network in 2020 to spur growth. The company expects to gain a competitive edge through edge computing services that offers the flexibility to better manage data traffic.

(You can read the full research report on AT&T here >>>)

Shares of Disney have lost -12.8% over the past six months against the Zacks Media Conglomerates industry’s fall of -13%. The Zacks analyst believes that Disney will benefit from the growing popularity of Disney+ owing to a strong content portfolio and a cheaper bundle offering.

The company also reshuffled its upcoming movie release dates with Mulan, now set to open on Jul 24 followed by Jungle Cruise on Jul 30. The opening of the Shanghai Disneyland theme park is a positive. Moreover, resumption of NBA at Walt Disney World in Florida during July is a key catalyst.

However, Disney’s businesses are affected by the coronavirus outbreak. The company closed its domestic parks and hotels indefinitely, suspended cruise lines, halted film and TV productions and shuttered retail stores in mid-March. This is expected to hurt its top line in the near term. Moreover, a leveraged balance sheet is a headwind.

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

PepsiCo’s shares have lost -1.4% over the past three months against the Zacks Soft Drinks Beverages industry’s fall of -4%. The Zacks analyst believes that the company will have ample flexibility to meet the investment needs of its business and return cash to shareholders.

The company’s top and bottom line surpassed the Zacks Consensus Estimate for the fifth straight quarter in first-quarter 2020. Results gained from its strong portfolio of brands, a responsive supply chain and flexible go-to-market systems, which helped maintain continued supplies amid the coronavirus pandemic.

However, the company withdrew its view for 2020 citing uncertainties across its geographies, retail channels and consumer behaviors due to the coronavirus outbreak. It predicts organic revenues to decline at a low single-digit rate in the second quarter. Also, adverse currency rates are likely to hurt results in 2020.  

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

Other noteworthy reports we are featuring today include Union Pacific (UNP), American Express (AXP) and Bayer Aktiengesellschaft (BAYRY).

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Sheraz Mian

Director of Research

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

AT&T (T) Rides on Streaming Services, Debt Reduction Efforts

Disney+ Drives Disney (DIS) Amid Coronavirus-Led Disruption

PepsiCo (PEP) Snacking Business Remains Robust Amid Pandemic

Featured Reports

Cost-Cutting Buoys Union Pacific (UNP) Amid Coronavirus Woes

The Zacks analyst praises the company's efforts to control costs in a bid to drive its bottom line. However, the coronavirus-induced contraction in volumes raises concerns.

Decline in Expenses to Aid American Express' (AXP) Margins

Per the Zacks analyst, halt in advertising, slow down of launch of new products, will lower marketing expenses and aid margins.

Bayer (BAYRY) Boasts Strong Portfolio Amidst Competition

Per the Zacks Analyst, Bayer has made several acquisitions and entered into a number of deals to boost its portfolio.

Restructuring Aids General Electric (GE), Power Segment Ails

Per the Zacks analyst, General Electric's business portfolio-restructuring program continues to lend momentum to it.

Eats Business Aids Uber (UBER) Amid Muted Rides Growth

Although, the rides business is seeing week-over-week improvement in demand, it is still down 70% year over year. Meanwhile, the Zacks analyst is impressed by the continued surge in Eats business.

Pre-Salt Reserves Boosts Petrobras (PBR), Debt Pile Hurts

Petrobras' stakes in Brazil's attractive pre-salt oil reservoirs should boost its earnings outlook. However, the Zacks analyst is concerned over the company's huge debt load of $73.1 billion.

Rising Farm Income to Aid Deere (DE), Coronavirus a Woe

Per the Zacks analyst, Deere will likely gain from growing U.S farm income and acquisitions. However the impact of the coronavirus outbreak on its supply chain and demand remains a concern.

New Upgrades

Tesla (TSLA) to Gain From Rising Model 3/Y Deliveries

Per the Zacks analyst, rising Model 3 delivery, which forms a major chunk of Tesla's overall deliveries, is aiding its prospects. Model Y's deliveries began in March, is also set to boost profits.

MPLX LP (MPLX) Banks on Wink-to-Webster Crude Oil Pipeline

The Zacks analyst believes that MPLX will earn incremental fee-based revenues from its Wink-to-Webster crude oil pipeline that will carry oil from the Permian to the U.S. Gulf Coast.

Residential Customers, Investments Aid Atmos Energy (ATO)

Per the Zacks analyst, Atmos Energy's high increased earnings from residential customers and ongoing investments to strengthen infrastructure, will improve reliability and drive performance.

New Downgrades

Coronavirus-Led Disruption Hurts FUJIFILM's (FUJIY) Progress

Per the Zacks analyst, coronavirus-led uncertainty along with a debt-ridden balance sheet is expected to impede FUJIFILM's prospects despite solid growth in the healthcare business.

Weak Demand and Supply Chain Disruptions to Hurt Flex (FLEX)

Per the Zacks analyst, soft demand from data center and telecom customers is likely to weigh on Flex's near-term financial performance.

Higher Operating Expenses Hurt Change Healthcare (CHNG)

Per the Zacks analyst, rise in total operating expenses, primarily due to higher selling, general and administrative costs, might hurt Change Healthcare's operating margin expansion.

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Union Pacific Corporation (UNP) : Free Stock Analysis Report
 
ATT Inc. (T) : Free Stock Analysis Report
 
PepsiCo, Inc. (PEP) : Free Stock Analysis Report
 
The Walt Disney Company (DIS) : Free Stock Analysis Report
 
Bayer Aktiengesellschaft (BAYRY) : Free Stock Analysis Report
 
American Express Company (AXP) : Free Stock Analysis Report
 
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