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Top Stock Reports for Chevron, HSBC & Sanofi

Mark Vickery

Friday, November 15, 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 Chevron (CVX), HSBC Holdings (HSBC) and Sanofi (SNY). 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 >>>

Chevron’s shares have outperformed the Zacks Integrated Oil industry year to date (+12.1% vs. -0.2%). The Zacks analyst believes that Chevron’s well economics in the Permian also continues to show improvement as the company has been able to achieve a 40% reduction in its development and production costs since 2015.

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.

However, the continued drop in Chevron's downstream segment earnings (partly attributable to a fall in domestic refined products sales margins) is a concern. In particular, Chevron's high-profile Gorgon LNG development in Australia is suffering from mechanical issues that may restrict its ramp-up.

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

Shares of HSBC have lost 12.9% in the past six months against Zacks Foreign Banks industry’s rise of 0.3%. The Zacks analyst believes that while the company’s initiatives to improve market share in the U.K. and China are likely to lead to an increase in expenses and hurt bottom-line growth, these efforts will support financials over the long term.

Its third-quarter 2019 results reflect lower revenues and rise in credit costs. Additionally, its initiatives to strengthen digital capabilities globally and improve operating efficiency through further restructuring actions will go a long way in supporting profitability.

However, slow economic growth in Europe, uncertainty over Brexit implications and weak loan demand are likely to continue hurting revenue growth. Given the dismal revenue growth assumptions, the company no longer expects to achieve its targeted return on tangible equity ratio next year.

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

Sanofi’s shares have gained 7.1% over the past three months against the Zacks Large Cap Pharmaceuticals industry's rise of 6.3%. The Zacks analyst believes that Sanofi’s Specialty Care segment is on a strong footing, particularly with the regular label expansion of Dupixent. 

Dupixent is now annualizing at around €2 billion in sales after just around two years in the market and could prove to be key long-term driver. The performance of the Vaccines and Consumer Healthcare franchises also improved of late. Sanofi’s R&D pipeline is strong and it delivered impressive results with several positive data read-outs and the achievement of regulatory milestones this year.

However, headwinds include weak performance of the Diabetes unit, generic competition for many drugs and slower-than-expected uptake of core products like Praluent.

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

Other noteworthy reports we are featuring today include Sony (SNE), Aon (AON) and Moody's (MCO).

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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

Chevron (CVX) to Gain from Stellar Permian Operation

Restructuring Efforts to Aid HSBC (HSBC), Revenues a Concern

Sanofi (SNY) Diabetes Sales Weak, Specialty Care Unit Strong

Featured Reports

Sony (SNE) Benefits from Realignment of Business Portfolio

Per the Zacks analyst, execution of measures to realign its business portfolio, like withdrawing from the PC business and selling the battery business, is driving Sony's operating margin growth.

Strategic Initiatives Aid Aon (AON), High Debt Level Hurts

Per the Zacks analyst, a number of acquisitions and collaborations have helped Aon enhance its capabilities, which has in turn improved its bottom-line.

AMD Banks on Strength in Product Portfolio & Partnerships

Per the Zacks analyst, Advanced Micro Devices is benefiting from robust adoption of latest EYPC, Ryzen and Radeon processors.

Diverse Revenues, Strategic Acquisitions Aid Moody's (MCO)

Per the Zacks analyst, Moody's diverse revenue mix and low-risk product portfolio will likely aid growth.

Strength in Categories Aid Ross Stores' (ROST) Sturdy Comps

Per the Zacks analysts, Ross Stores witnessed robust comps in the past few quarters driven by strength across categories, except ladies.

Investment in Brands Portfolio to Power Brown-Forman (BF.B)

Per the Zacks analyst, Brown-Forman's investments in the brands portfolio, including broadening of the Jack Daniel's family of brands and growing the super-premium spirits category, should aid growth.

Solid Demographics, Household Formation Aid AvalonBay (AVB)

Per the Zacks Analyst, AvalonBay will gain on its high quality assets, favorable demographics and household formation amid stable economy and job gains. Yet, rising supply is a key concern.

New Upgrades

Ubiquiti (UI) Rides on Resilient Business Model & Cost Cuts

Per the Zacks analyst, Ubiquiti is committed to reducing operational costs through a self-sustaining mechanism for product support and expects its resilient business model to fuel its growth momentum.

Cracker Barrel's (CBRL) Sales-Building Efforts to Aid Growth

Per the Zacks analyst, Cracker Barrel increased focus on menu innovation, consistent unit growth and cost savings efforts to drive growth. Cracker Barrel's expansion strategies also bode well.

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

Low Margins, Weak Legacy Business Hurt DXC Technology (DXC)

Per the Zacks analyst, decline in traditional infrastructure business is affecting DXC Technology's top line. Also, delivery execution delays and cost overruns on European deals are hurting margins.

Slowdown in U.S Beer Sales to Hurt Owens-Illinois (OI)

Per the Zacks Analyst, Owens-Illinois' results will continue to bear the brunt of the continued slowdown in beer consumption in the United States and unfavorable foreign currency headwinds.

Rising Cash Production Expenses Hurt Antero Resources (AR)

The Zacks analyst is concerned as increasing cash production expense will continue to hurt Antero Resources' bottom-line.

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Sanofi (SNY) : Free Stock Analysis Report
Sony Corporation (SNE) : Free Stock Analysis Report
Moody's Corporation (MCO) : Free Stock Analysis Report
HSBC Holdings plc (HSBC) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
Aon plc (AON) : Free Stock Analysis Report
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