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Top Analyst Reports for Verizon, McDonald's & TOTAL

Mark Vickery
Top Analyst Reports for Verizon, McDonald's & TOTAL

Tuesday, November 5, 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 Verizon Communications Inc. (VZ), McDonald's (MCD) and TOTAL (TOT). 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 >>>

Verizon’s shares have outperformed the Zacks Wireless National industry year to date (19.1% vs. 6.5%). The Zacks analyst believes that Verizon has embarked on a new operating structure with Verizon 2.0 that aims to align the business model with evolving customer needs.

Focus on online content delivery, mobile video and online advertising will likely drive future growth. Verizon aims to cut costs through employee reduction and divestments as it ramps up investment in its next-generation 5G network, which is expected to be the next growth driver. The company has also upped the ante against rivals by launching 5G Ultra Wideband network in select locations of the country.

However, it continues to struggle in a competitive U.S. wireless market. The company's wireline division is struggling with losses in access lines due to competitive pressure from VoIP service providers. Verizon is spending heavily on promotion and lucrative discounts to woo customers, which contracts margins.

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

Shares of McDonald's have lost 5.1% in the past six months against the Zacks Restaurants industry’s decline of 2.1%. The Zacks analyst believes that the company’s increased focus on delivery and accelerated deployment of EOTF restaurants in the United States is an added positive. These apart, efforts to drive growth in international markets are encouraging.

In second-quarter 2019, the company posted mixed results, wherein earnings missed the estimate but revenues beat the same. Notably, its various sales and digital initiatives as well as positive comps bode well. Furthermore, global comps at McDonald’s have been positive over the trailing 16 quarters.

However, high labor costs and currency headwinds woes linger. Additionally, revenues have been under pressure for quite some time. Even its heightened focus on refranchising might cut the capital requirements and facilitate EPS growth. 

(You can read the full research report on McDonald's here >>>)

TOTAL’s shares have gained 10.4% over the past three months against the Zacks International Integrated Oil industry’s rise of 3.1%. The Zacks analyst believes that Ongoing fluctuation in the commodity prices is hurting the company despite growth in production volumes.

TOTAL's operations in some politically-troubled regions and increasing competition might impact the company’s profitability. Due to its global presence, it is exposed to risks associated with pursuing business abroad. However, TOTAL continues to benefit from strong contribution from new startups and expanding upstream portfolio that has above industry-average exposure to the faster-growing hydrocarbon producing regions of the world.

Cost reduction initiatives will boost the margins of the company. Strategic acquisitions and divestment of assets that are not in sync with its long-term objectives are going to boost performance of the company.

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

Other noteworthy reports we are featuring today include Amgen (AMGN), Broadcom (AVGO) and UPS (UPS).

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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

Verizon (VZ) Rides High on Wireless Portfolio Strength

McDonald's (MCD) Banks on Sales Initiatives Amid High Costs

Production Boost from Startups, Cost Savings Aid TOTAL (TOT)

Featured Reports

Amgen (AMGN) Counts on New Drugs Amid Rising Biosimilar Woes

While Amgen's newer drugs are driving sales, biosimilar and brand competition for its legacy products is hurting the top-line, points out the Zacks analyst.

Broadcom (AVGO) Rides on Portfolio Strength & Acquisitions

Per the Zacks analyst, Broadcom is benefiting from its expanding product portfolio and innovative pipeline.

UPS Rides on Strong Free Cash Flow Amid Trade Uncertainty

The Zacks analyst likes the robust free cash flow generation at UPS. E-commerce growth is an added positive.

Opdivo, Eliquis Fuel Bristol-Myers (BMY) Amid Competition

Per the Zacks analyst, label expansion of blockbuster drug Opdivo and blood thinner drug Eliquis maintain momentum for Bristol-Myers. However, increasing competition for Opdivo is a concern.

Aetna Synergy to Boost CVS Health (CVS), PBM Season Solid

The Zacks analyst is bullish about the huge synergy benefit that CVS Health has been gaining from the $70 billion buyout of Aetna. Strong 2020 PBM selling season is another upside.

Schlumberger (SLB) to Grow on International Oilfield Service

Rising drilling activities in the international market will continue to boost demand for Schlumberger's oilfield service.

Rate Cuts to Hurt BB&T's (BBT) Top Line Despite Loan Growth

Per the Zacks analyst, while continued loan growth and BB&T's inorganic growth efforts are expected to aid top line, its net interest margin will likely be hurt due to the recent decline in rates.

New Upgrades

Franchise Strength, E-Sports Efforts Aids Activision (ATVI)

Per the Zacks analyst, Activision's foray into e-sports and user base expansion from strength in popular franchises are driving top-line growth.

Ollie's Bargain (OLLI) Store Growth Strategy to Drive Sales

Per the Zacks analyst, Ollie's Bargain business model of "buying cheap and selling cheap", focus on store productivity and expansion of customer reward program is likely to fuel top-line performance.

Strength in Service & Custodial Units Aid HealthEquity (HQY)

Per the Zacks analyst, solid growth in Service and Custodial segments continue to boost HealthEquity. Robust growth in HSA (Health Savings Account) members continues to buoy optimism in the stock.

New Downgrades

Soft Own-Beer Volumes Weigh on AB InBev's (BUD) Top Line

Per the Zacks analyst, soft own-beer volumes due to declines in China and the United States more than offset the growth in non-beer volumes, causing total volumes to decline in third-quarter 2019.

Weak Auto Production, Competition Hurt TE Connectivity (TEL)

Per the Zacks analyst, sluggish global auto production remains a headwind for TE Connectivity's Transportation Solutions segment. Also, rising competition from Amphenol and Molex is a risk.

Cummins (CMI) to be Hurt by Low Demand for Heavy-Duty Trucks

Per the Zacks analyst, declining demand for heavy trucks is likely to mar its prospects in both domestic and international regions, going forward.

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Verizon Communications Inc. (VZ) : Free Stock Analysis Report
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
TOTAL S.A. (TOT) : Free Stock Analysis Report
McDonald's Corporation (MCD) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
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