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Top Stock Reports for Facebook, Bank of America & Home Depot

Mark Vickery

Thursday, November 21, 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 Facebook (FB), Bank of America (BAC) and Home Depot (HD). 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 >>>

Facebook’s shares have outperformed the S&P 500 year to date (+50.7% vs. +22.8%). The Zacks analyst believes that solid mobile ad revenues, driven by impressive growth in Instagram Stories and Feed, and Facebook News Feed, are a major growth driver.

Interactive Stories ads on Instagram are likely to lead to better interaction among people, businesses and advertisers. Moreover, strong adoption of Oculus Quest is a key catalyst. Facebook’s initiatives to improve privacy, transparency and authenticity of ads are likely to boost user trust and engagement.

Further, partnerships with ESPN and Fox for sports-related streaming on Facebook Watch are a positive. However, a persistent mix shift toward Stories is anticipated to hurt ARPU. Also, the company’s rising regulatory headwinds, including the antitrust investigation and the EU’s investigation of Libra, are a concern.

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

Shares of Bank of America have gained 20.2% in the past three months against the Zacks Major Regional Banks rise of 18.5%. The Zacks analyst believes that opening branches in new regions, improved digital offerings, decent loan growth and efforts to control costs will aid profitability despite the Fed’s accommodative monetary policy stance. 

The bank's earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters. Also, efforts to focus more on consumer banking business have started bearing fruits. The company's enhanced capital deployment actions reflect a strong balance sheet position.

However, dismal performance of capital markets continues to hurt the company’s investment banking and trading businesses, which in turn will hamper fee income growth. Litigation issues related to its business misconducts in the pre-crisis period are likely to lead to higher legal costs.

(You can read the full research report on Bank of America here >>>)

Home Depot’s shares have gained 16.9% over the past six months against the Zacks Retail Building Products industry's rise of 17.3%. The Zacks analyst attributed the company’s recent setbacks to lower-than-expected sales results in third-quarter fiscal 2019, which was followed by a slashed view for fiscal 2019.

The top line lagged primarily due to timing issues related to the receipt of certain benefits from the One Home Depot investments. Further, commodity deflation in lumber and copper partly hurt the company’s comparable sales performance. Moreover, its margins remained soft.

However, the company kept its earnings beat streak alive. Earnings benefited from progress on strategic investments. Its efforts to provide an interconnected shopping experience to customers, with innovative products and improved productivity, also position it for growth.

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

Other noteworthy reports we are featuring today include SAP SE (SAP), Amgen (AMGN) and Intuitive (ISRG).

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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

Mobile Ad Growth, Instagram Strength Benefits Facebook (FB)

New Branches, Loan Growth Aid BofA (BAC), Lower Rates a Woe

Home Depot (HD) Stands to Gain from One Home Depot Plan

Featured Reports

SAP Rides on Cloud Initiatives & Growth in S/4HANA Platform

Per Zacks analyst, SAP's resilient Cloud and Software business, act as staple growth drivers.

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

The Zacks analyst says that Amgen's new drugs like Aimovig and Evenity provide incremental growth opportunities amid biosimilar erosion of its legacy products.

Flagship da Vinci Platform Aids Intuitive Surgical (ISRG)

Intuitive Surgical continues to gain from its flagship da Vinci platform. The Zacks Analyst is also upbeat about the company's expansion in China.

Target's (TGT) Omnichannel & Store Expansion to Boost Sales

Per the Zacks analyst, Target's focus on enhancing omni-channel capacities and expanding same-day delivery options are likely to fuel top-line growth.

Investment Plan Aids Duke Energy (DUK), Commodity Prices hurt

Per the Zacks Analyst, the company's robust five-year capital plan will drive earnings base growth.

TC Energy (TRP) to Gain from C$30B Secured Growth Program

The Zacks analyst believes that TC Energy's C$30 billion of accretive growth projects should support the company's stated dividend growth commitment of 8-10% annually out to 2021.

Cost Control, Assets Aid BNY Mellon (BK) Amid Lower Rates

Per the Zacks analyst, manageable expense levels, decent assets balance and global presence will likely aid BNY Mellon. Yet, lower interest rates are expected to hurt revenue growth to some extent.

New Upgrades

Applied Materials (AMAT) Rides on Foundry & Logic Spending

Per the Zacks analyst, strength in semiconductor equipment, solid execution and strong customer spending in foundry and logic which are required in IoT and other applications will remain drivers.

Lithia's (LAD) Acquisition of Dealerships to Boost Prospects

Per the Zacks analyst, the acquisitions of Lincoln Morgantown and Hazleton Honda dealerships are expected to boost Lithia Motors' profitability and prospects going forward.

Strong Property-Casualty Business Aids RLI Corp. (RLI)

Per the Zacks analyst, premium in property-casualty business has risen over the years led by a diversified and compelling product portfolio, sturdy business expansion and sustained increase in price.

New Downgrades

Weakening Momentum in Consumer Market Hurts Semtech (SMTC)

Per the Zacks Analyst, Semtech is suffering from sluggishness in the high-end consumer market due to weakening smartphone demand.

High Operating Costs Likely to Hurt Extended Stay (STAY)

Per the Zacks analyst, increase in payroll expenses and decline in comparable system-wide RevPAR is likely to hurt Extended Stay America's hotel operating costs.

Conservative Capital Spending by US Drillers Hurts RPC (RES)

The Zacks analyst is concerned as the slowdown in U.S. drilling, owing to conservative capital spending by crude explorers, will hurt RPC's oilfield service business.

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SAP SE (SAP) : Free Stock Analysis Report
Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Facebook, Inc. (FB) : Free Stock Analysis Report
Bank of America Corporation (BAC) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
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