Top Research Reports for Microsoft, Wells Fargo & Chevron

Monday, December 16, 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 Microsoft (MSFT), Wells Fargo (WFC) and Chevron (CVX). 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 >>>

Microsoft’s shares have outperformed the S&P 500 year to date (52.1% vs. 25.2%). The Zacks analyst believes that Microsoft is benefiting from growing user base of its different applications like Office 365 commercial, Dynamics, Outlook mobile and Teams.

Moreover, Azure’s expanding customer base is a key catalyst. Microsoft’s gaming segment is performing well, primarily driven by a combination of Xbox Live, Game Pass subscriptions and Mixer, which are driving user engagement. Further, acquisitions like PlayFab and GitHub expand Microsoft’s total addressable market (TAM) and penetration.

Additionally, latest contract wins from the Department of Defense remain notable. However, projections of a moderating growth rate in commercial cloud gross margin, and OEM Pro and Windows commercial businesses is a headwind. Moreover, stiff competition from the likes of Google, Apple and Sony present issues.

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

Shares of Wells Fargo have gained +10.3% in the past three months against the Zacks Major Regional Banks industry’s rise of +13%. The Zacks analyst believes that strategic acquisitions along with rising loans and deposit balances are impressive. Also, recent Fed's move on interest rate is likely to aid net interest margin (NIM).

The company’s earnings surprise history remains impressive, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Though its investment in the businesses to enhance compliance and risk-management capability seems impressive, Wells Fargo has been slapped with several sanctions, which continues on the CFPB's dissatisfaction with the bank’s progress on fixing risk-management issues.

Also, rising costs curb bottom-line expansion. Recently, Wells Fargo appointed Charles W. Scharf as its second CEO post-public and political outrage concerning the sales scam in 2016.

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

Chevron's shares have lost -2.8% over the past six months against the Zacks Integrated Oil industry's decline of -7.6%. The Zacks analyst believes that the company’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.

hevron’s well economics in the Permian also continues to improve as the company has been able to achieve a 40% reduction in its development and production costs since 2015. However, the continued drop in Chevron's downstream segment earnings (partly attributable to a fall in domestic refined products sales margins) is a concern.

Moreover, the supermajor’s massive $10-$11 billion impairment charge is expected to increase its gearing. Hence, investors are advised to wait for a better entry

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

Other noteworthy reports we are featuring today include American Express (AXP), Novo Nordisk (NVO) and QUALCOMM (QCOM).

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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

Microsoft (MSFT) Strong on High Cloud & Office 365 Adoption

Loan Growth Supports Wells Fargo (WFC), Legal Issues Linger

Chevron (CVX) to Gain from Stellar Permian Operation

Featured Reports

Novo Nordisk (NVO) Baosts Strng Pipeline Amidst Competition

Per the Zacks analyst, Novo Nordisk has a strong presence in the Diabetes Care market and boasts of a strong pipeline.

Solid Balance Sheet, Revenue Rise Aid American Express (AXP)

Per the Zacks analyst, revenue rise from business growth in new verticals, shift toward digital, increase in consumer spending, is impressive.

Qualcomm (QCOM) Rides on 5G Chip Design & Product Innovation

Per the Zacks analyst, Qualcomm remains poised to retain its leadership in 5G, global chipset market and mobile connectivity.

Restructuring Aid General Electric (GE), Tariff Woes Drag

Per a Zacks analyst, General Electric (GE) is likely to gain from restructuring actions, including exposure reduction in GE Capital businesses.

Booking Holdings (BKNG) Rides on Gross Bookings Amid Risks

Per the Zacks analyst, growing alternative accommodation business and room nights number are aiding gross bookings of Booking Holdings.

Solid Investment, Customer Growth Aid American Water (AWK)

Per the Zacks analyst American Water Works' $20 to $22 billion capital spending plan for next ten years will drive its performance.

Tesla (TSLA) Rides on Model 3 Sales Amid High Capex

While rising Model 3 deliveries are aiding Tesla's top line, the Zacks analyst is concerned about high capital expenditure and R&D costs.

New Upgrades

DaVita (DVA) Gains Ground on Strong U.S. Dialysis Revenues

DaVita has been gaining consistently from strength in U.S. Dialysis Services arm. The Zacks Analyst is also optimistic about a raised guidance for 2019.

Solid end-market prospects Bode Well Quanta Services (PWR)

Per the Zacks analyst, solid prospects in its Electric Power as well as Pipeline and Industrial Infrastructure segments are likely to drive growth in the coming quarters.

Murphy USA (MUSA) to Gain from Proximity to Walmart Stores

The Zacks analyst believes that the proximity of Murphy USA's fuel stations to Walmart supercenters helps the company to leverage the strong and consistent traffic that these stores attract.

New Downgrades

Soft Margin at Segments Weigh on FEMSA's (FMX) Bottom Line

Per the Zacks analyst, FEMSA grapples with soft operating margins at FEMSA Comercio's Health and Proximity Divisions on operating expense deleverage. This is partly weighing on earnings performance.

Weak Lease Demand Weighs on Triton International (TRTN)

Per the Zacks analyst, sluggish lease demand due to the U.S.-China trade tensions, is taking a significant toll on the company. Its exorbitant debt levels are an added concern.

Weaker Steel Prices to Weigh on Cleveland-Cliffs (CLF)

Per the Zacks analyst, falling U.S. steel prices, partly due to weaker demand, will hurt Cleveland-Cliffs' pellet price realization rate and dent its margins.

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Wells Fargo & Company (WFC) : Free Stock Analysis Report
 
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
 
Novo Nordisk A/S (NVO) : Free Stock Analysis Report
 
Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
Chevron Corporation (CVX) : Free Stock Analysis Report
 
American Express Company (AXP) : Free Stock Analysis Report
 
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