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Top Stock Reports for Alphabet, AT&T & Philip Morris

Sheraz Mian

Friday, June 26, 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 Alphabet (GOOGL), AT&T (T) and Philip Morris International (PM). 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 >>>

Alphabet shares have outperformed the Zacks Internet Services industry over the past year (+33.9% vs. +12.2%) despite the pressure on advertizing revenues as a result of the economic downturn. The Zacks analyst attributres the stock's momentum to the company's strengthening cloud unit, which has emerged as one of the top players in the space along with Amazon (AMZN) and Microsoft (MSFT). 

Further, major updates in its search segment are enhancing the search results, which is a major positive. Moreover, Google’s robust mobile search is gaining solid momentum. Additionally, strong focus on innovation of AI techniques and the home automation space should aid business growth in the long term.

Further, its deepening focus on wearables category remains a tailwind. However, the company’s growing litigation issues and increasing expenses might hurt profitability. 

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

Shares of AT&T have lost -24.3% over the past six months against the Zacks Wireless National industry’s fall of -12%, reflecting the company's debt-heavy balance sheet during a period of economic uncertainty. The Zacks analyst believes that AT&T is well placed to benefit from streaming services like AT&T TV and HBO Max.

The company is committed to a three-year financial framework with sustained investments and debt-reduction efforts. 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 offer the flexibility to better manage data traffic.

However, AT&T is witnessing a steady decline in linear TV subscribers and legacy services. Its wireline division is also facing loss in access lines 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 canceled its stock buyback program due to the severity of the virus outbreak and withdrew guidance.

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

Philip Morris’ shares have gained +2.2% over the past three months against the Zacks Tobacco industry’s rise of +8.9%. The Zacks analyst believes that its second-quarter show is likely to be hurt by lower duty-free sales and delay in minimum price enforcement in Indonesia stemming from coronavirus-led restrictions, among others.

The stock further declined when management said that it expects coronavirus to be detrimental to 2020 performance, during its first-quarter 2020 earnings release. The company withdrew its 2020 earnings view and offered guidance for the second quarter, which is expected to bear the largest quarterly impact of COVID-19 this year.

Nonetheless, the company doesn’t expect facing any out of stock situation in core operating income markets. Also, its first-quarter earnings and sales grew year over year, reflecting continued momentum in the smoke-free portfolio and a solid combustible tobacco pricing.  

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

Other noteworthy reports we are featuring today include T-Mobile US (TMUS), Texas Instruments (TXN) and United Parcel Service (UPS).

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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

Alphabet (GOOGL) Rides on Diversification; Legal Troubles Ail

AT&T (T) Rides on Streaming Services, 5G & Debt Reduction

Philip Morris (PM) Troubled by COVID-19 Woes, Pricing Aids

Featured Reports

Solid 5G Deployments, Subscriber Growth Aid T-Mobile (TMUS)

Per the Zacks analyst, robust 5G deployments, accelerated subscriber growth and continuous network modernization efforts drive T-Mobile's performance.

Texas Instruments (TXN) Banks on Solid Data Center Demand

Per the Zacks analyst, rising data center demand is accelerating Texas Instruments' revenues in the enterprise systems market.

E-Commerce Boosts UPS Amid Coronavirus-Induced Adversities

The Zacks analyst believes that the surge in e-commerce demand amid current market volatility is a huge positive for UPS.

Solid Pricing Aids Altria (MO) Amid Weak Cigarette Volumes

Per the Zacks analyst, Altria has been benefiting from its solid pricing, which aided the company in first-quarter 2020.

Core MedSurg Unit Aids Stryker (SYK), Pricing Pressure Ails

Per the Zacks analyst, Stryker continues to gain from solid prospects of its core MedSurg arm.

Essentials Items Lift Target's (TGT) Sales, Margin a Concern

Per the Zacks analyst, Target witnessed higher sales for Essentials and Food & Beverage categories in the first quarter with solid contribution from digital channel. However, margins remain a concern.

Solid User Growth & Premium Content Demand Aids Snap (SNAP)

Per the Zacks analyst, Snap benefits from an improving user growth driven by strong adoption of Augmented Reality (AR) Lenses and demand for premium Discover content and Shows.

New Upgrades

RH Banks on Multi-Channel Platform Strength & New Galleries

Per the Zacks analyst, RH's strength of the multi-channel platform and membership model, along with new Galleries are likely to boost near-term sales.

Strong Markets & Acquisitions Aid Commercial Metals (CMC)

Per the Zacks analyst, robust key end markets, acquisitions, favorable rebar-margin environment and construction demand in the United States and Poland will drive Commercial Metals' results.

Cost-Saving Moves and Buyouts to Aid Applied Industrial (AIT)

Per a Zacks analyst, Applied Industrial's (AIT) cost-saving actions, including pay reduction and others, to help it mitigate the pandemic-induced financial stress.

New Downgrades

Pandemic-led Sales Disorder, Weak Margin Irks Omnicell (OMCL)

The Zacks analyst is worried about Omnicell witnessing slowdown in product booking and hospital purchasing decisions amid the pandemic-led chaos. Gross margin contraction is discouraging too.

SkyWest (SKYW) Hit by Coronavirus-Led Weak Air-Travel Demand

Per the Zacks analyst, the low demand scenario, thanks to coronavirus, is hurting SkyWest's bottom line. The company's high operating expenses add to the woes.

Investments Aids Hawaiian Electric (HE), Cyber Attacks Hurt

Per the Zacks Analyst, systematic investments in transmission and distribution projects will drive growth over the long haul. However, eminent cyber attacks might deter the stock's growth.

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United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
TMobile US, Inc. (TMUS) : Free Stock Analysis Report
ATT Inc. (T) : Free Stock Analysis Report
Philip Morris International Inc. (PM) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
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