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Top Research Reports: Chevron, AbbVie, Phillips 66 & More

Kalyan Nandy

Tuesday, August 6, 2019

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features updated research reports on 16 major stocks, including Chevron (CVX), AbbVie (ABBV) and Phillips 66 (PSX). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Chevron’s shares have outperformed the Zacks Integrated Oil industry year to date (+9.1% vs. -2.7%). Chevron's second-quarter earnings increased 26% year over year and exceeded the consensus estimate. Free cash flow rose and production hit a record level. The Zacks analyst thinks Chevron’s existing project pipeline is among the best in the industry, targeting volume growth of around 4-7% in 2019 thanks to planned expansion in the Permian Basin. Chevron pumped 55% more out of the West Texas shale play in the quarter compared with the year-ago period, with output set to soar in coming years. Moreover, growing free cash flow should enable Chevron to distribute steady and attractive dividends in the future. However, drop in refining earnings once again cut into gains from rising E&P income. Its massive capex might also play spoilsport. Hence, investors are advised to wait for a better entry point.

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

Shares of AbbVie have lost -29.2% year to date, versus the Zacks Large-Cap Pharmaceuticals industry's decline of -2.9%. AbbVie beat estimates for earnings and sales in the second quarter and raised its earnings guidance for the second time this year. The Zacks analyst thinks AbbVie’s key drug, Humira, is performing well based on strong demand trends despite new competition. Additionally, Imbruvica has multibillion dollar potential. AbbVie has been successful in expanding approvals for its cancer drugs, Imbruvica and Venclexta. Moreover, it has an impressive late-stage pipeline, comprising several products with multibillion-dollar potential which are expected to be launched in the near term. The acquisition of Allergan, if successful, should diversify AbbVie’s revenue base and accelerate its non-Humira business. Sales erosion due to direct biosimilar competition to Humira in international markets is a big headwind.

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

Phillips 66’s shares have outperformed the Zacks Oil Refining and Marketing industry over the past year, losing -22% vs. -36%. The Zacks analyst thinks Phillips 66 is strongly positioned to gain from the rising demand for midstream assets in the United States, where takeaway capacity constraint is a significant problem. Moreover, the company is well-placed for the upcoming change in regulations, namely IMO 2020, with its updated refining assets. It is also committed to returning cash back to stockholders through dividend payments and share repurchases. Recently, the company reported strong second-quarter 2019 earnings, courtesy of contributions from pipeline transportation businesses. However, a lower crude utilization rate has hurt refining operations. Moreover, uncertainties in the global market are likely to hamper demand for petrochemicals, which will affect the firm’s Chemical business. Rising operating costs are also a threat to the company.

(You can read the full research report on Phillips 66 here >>>).

Other noteworthy reports we featured today include ConocoPhillips (COP), Qualcomm (QCOM) and Marriott (MAR).

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Note: Our Director of Research 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

Chevron (CVX) to Gain from Strong Permian Operation

AbbVie (ABBV) Eyes Diversification With Allergan Buyout

Phillips 66 (PSX) Banks on Midstream Unit, Refining Hurts

Featured Reports

Qualcomm (QCOM) Plagued by Softness in Demand from China

Per the Zacks analyst, Qualcomm is anticipated to face continued softness in demand from China with Huawei gaining prominence in the local market.

ConocoPhillips (COP) Hurt by Rising Production Expenses

Increasing production costs and operating expenses in 2019 will affect ConocoPhillips' bottom line, according to the Zacks analyst.

Marriott (MAR) Banks on Expansion Plans to Drive Growth

The Zacks analyst believes that Marriott's efforts to capitalize on the demand for hotels in international markets will continue to drive growth.

Premium Shale Properties Aid Anadarko's (APC) Production

Per the Zacks analyst, Anadarko's premium shale properties in Delaware, Denver-Julesburg basins and the Deepwater Gulf of Mexico are key production drivers.

Loan Growth Aids SunTrust (STI), Mortgage Business a Concern

Per the Zacks analyst, loan growth will aid SunTrust's revenues and its branch consolidation efforts will keep costs low.

Investments Aids Eversource (ES) Amid Northern Pass Loss

Per the Zacks analyst, Eversource's planned investments in 2019-2023 to strengthen operations will help it to overcome loss due to discontinuation of Northern Pass project.

Capital Growth Projects to Benefit ONEOK's (OKE) Production

Per the Zacks analyst, higher natural gas and natural gas liquids volumes & capital growth projects in the Permian Basin area will boost ONEOK's future performance.

New Upgrades

Fiserv (FISV) Benefits From Strategic Buyouts, Partnerships

The Zacks analyst is impressed with Fiserv's strategy to widen its client base and enhance its product portfolio with the help of buyouts and partnerships.

CDW Benefits From Robust Growth in Customer End Markets

Per the Zacks analyst, CDW's broad-based product and solutions portfolio is boosting growth across its customer markets, which include corporates, small business, government, education and healthcare.

Cardio and Vascular Unit Boosts Integer Holdings (ITGR)

Per the Zacks analyst, Integer Holdings continues to gain from its Cardio and Vascular product line on the back of solid peripheral vascular and structural heart growth.

New Downgrades

Lower Rates, Rising Expenses to Hamper BB&T's (BBT) Growth

Per the Zacks analyst, the Federal Reserve's accommodative monetary policy, lower interest rates and steadily increasing operating expenses will hamper BB&T's profitability in the quarters ahead.

Lower Containerboard Prices to Hurt WestRock (WRK)

The Zacks analyst is worried that lower containerboard prices, higher maintenance downtime as well as shrinking demand for processed and frozen food will dent WestRock's results.

Weak Demand, Higher Input Costs Ail Huntsman (HUN)

Per the Zacks analyst, weak demand in China and Europe will continue to hurt Huntsman's sales volumes. Higher raw material costs will also put pressure on its margins.

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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
Phillips 66 (PSX) : Free Stock Analysis Report
Marriott International (MAR) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
ConocoPhillips (COP) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
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