Top Stock Reports for Nike, Morgan Stanley & FedEx

Thursday, June 21, 2018

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 Nike (NKE), Morgan Stanley (MS) and FedEx (FDX). 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 >>>

Nike’s shares have outperformed the Zacks Shoes and Retail Apparel industry year to date (+19.5% vs. +16.3%), driven by strength in international business and the global NIKE Direct business which has been aiding its quarterly performance. Notably, the company delivered top- and bottom-line beat in third-quarter fiscal 2018 which also marked the 23rd straight earnings beat.

Quarterly results reflected significant progress on the Consumer Direct Offense, positioning it for strong profitable growth in the future. Further, it closed the third quarter with expectations of a trend reversal in its North America business in the fourth quarter, backed by the introduction of new innovation platforms and differentiated customer experiences in the marketplace.

Consequently, it provided robust guidance for fourth-quarter fiscal 2018 and initial view for fiscal 2019. However, its higher SG&A expenses are likely to continue hurting results in the fourth quarter. Estimates have been stable ahead of fourth quarter earnings.

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

Shares of Morgan Stanley have underperformed the Zacks Investment Banking industry over the last six months (-5.3% vs. -0.7%). Yet, the company possesses an impressive earnings surprise history, beating the Zacks Consensus Estimate in each of the trailing four quarters.

The Zacks analyst likes the company’s efforts to lower balance sheet risk and strengthen wealth management operations. These initiatives, along with cost saving initiatives will continue to support growth.

Also, continued market volatility is expected to aid trading revenues. However, muted investment banking performance is expected to hurt the company’s top-line growth. Further, higher interest expenses mainly owing to rise in interest rates are expected to hurt its net interest income to some extent.

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

FedEx’s shares have outperformed the Zacks Air Freight and Cargo industry and rival United Parcel Service in the last year. The company has gained +18.8% while the industry it belongs to and UPS have rallied +13.5% and +4.2%, respectively, in the same period.

Ushering in further good news, the company reported better-than-expected earnings per share and revenues in the fourth quarter of fiscal 2018. Both metrics also improved year over year. Results were aided by e-commerce growth and a buoyant U.S. economy. Additionally, higher shipping rates and volume growth are huge positives for FedEx.

Meanwhile, lower tax rates are boosting the company’s bottom-line performance. The Zacks analyst is also impressed by FedEx’s decision to reward shareholders through dividend payments and share buybacks.

However, high costs are hurting the bottom line. Significant investments at the company's Ground unit are pushing up costs as well. Capital expenses are estimated to be $5.6 billion for fiscal 2019. Trade war related fears are also weighing on FedEx.

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

Other noteworthy reports we are featuring today include TOTAL S.A. (TOT), Ingersoll-Rand (IR) and ArcelorMittal (MT).

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

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

Nike's (NKE) Consumer Direct Offense Bode Well, Margins Hurt

Trading Offset Morgan Stanley's (MS) Investment Banking Woes

High Volumes, Shipping Rates Aid FedEx (FDX), Costs Ail

Featured Reports

Delek (DK) to Gain from Massive Permian Footprint

The Zacks analyst believes that Delek should benefit from the extensive network of downstream operations in the core of the Permian shale field.

Acquisitions, Productivity Actions Buoy Celanese (CE)

The Zacks analyst thinks that Nilit and Omni Plastics acquisitions as well as operational cost savings through productivity actions will drive Celanese's profitability in FY18.

Strategic Acquisitions & E-commerce Sales Aid Watsco (WSO)

Per the Zacks analyst, Watsco is well poised to gain from strategic acquisitions and revenues from its e-commerce channel.

Debt Cuts, Action 2020 Initiatives Aid ArcelorMittal (MT)

The Zacks analyst is impressed with the company's efforts to reduce debt. Moreover, costs reduction and high-value products line expansion under its Action 2020 initiative should boost performance.

Increasing Premiums Aid Unum Group (UNM), Rising Costs Ail

Per the Zacks analyst, improving premiums will continue to boost Unum's top line, thereby driving overall performance. However, rising expenses will remain a concern.

Leggett's (LEG) Capital Allocation Solid, Rising Costs Ail

Per the Zacks analyst, disciplined capital allocation strategy and focused on making investments to develop its business to drive Leggett's growth. Commodity cost inflation is hurting margins.

Ellie Mae (ELLI) Gains from Encompass NG Lending Platform

Per the Zacks analyst, robust adoption of Encompass NG Lending Platform, well-integrated acquisitions and a strong balance sheet bode well for Ellie Mae.

New Upgrades

Diversity, Strategic Initiatives Aid Ingersoll-Rand (IR)

Per the Zacks analyst, Ingersoll-Rand gains from operations in multiple end-markets and countries. Also, its acquisitive nature and policy of rewarding shareholders handsomely have been beneficial.

Higher Oil Production, New Projects Aid TOTAL S.A. (TOT)

The Zacks analyst thinks that higher oil production with improved commodity prices and startup of new projects will boost the performance of TOTAL S.A.

Healthcare Contract Wins, Restructuring Benefits Jabil (JBL)

According to the Zacks analyst, Jabil's top-line growth is benefiting from contract wins in the healthcare & packaging business. Moreover, the restructuring program is driving profitability.

New Downgrades

Adverse Regulations, Costs Hurt Edison International (EIX)

Per the Zacks analyst, adverse regulatory decisions for 2018 GRC application may impact financial performance. Inability to recover uninsured wildfire-related costs may affect financial conditions.

Omnicom (OMC) Grapples with Client Concentration Risk

The Zacks analyst is worried about Omnicom's dependence on a few big clients. Further, the company's reliance on information technology systems makes it vulnerable to cybersecurity risks.

Input Cost Inflation to Hurt Conagra Brands' (CAG) Margins

Per the Zacks analyst, Conagra Brands' margins are likely to continue being hurt by rising packaging and transportation expenses. The company expects input cost inflation to be 3.7% in fiscal 2018.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
TOTAL S.A. (TOT) : Free Stock Analysis Report
 
NIKE, Inc. (NKE) : Free Stock Analysis Report
 
ArcelorMittal (MT) : Free Stock Analysis Report
 
Morgan Stanley (MS) : Free Stock Analysis Report
 
Ingersoll-Rand PLC (Ireland) (IR) : Free Stock Analysis Report
 
FedEx Corporation (FDX) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research