Thursday, March 14, 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 Oracle (ORCL), U.S. Bancorp (USB) and Enterprise Products (EPD). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Oracle’s shares have underperformed the Zacks Computer Software industry in the past year, gaining +1.3% vs. +17.3%. Oracle is one of the largest enterprise-grade database, middleware and application software providers. The Zacks analyst thinks the company is benefiting from strong adoption of its cloud-based solutions, comprising Fusion ERP and Fusion HCM, among others. Partnerships with the likes of Accenture are helping the company rapidly expand its cloud-base clientele.
Also, anticipated strong demand for the next-generation autonomous database supported by machine learning will boost competitive position against Amazon Web Services (AWS). Nonetheless, stiff competition in the cloud market from dominant players is anticipated to limit margin expansion.
Lower hardware volumes are anticipated to hurt top-line growth, consequently keeping margins under pressure. Additionally, integration risks from buyouts remain a concern.
Shares of U.S. Bancorp have outperformed the Zacks Major Banks industry over the past six months, losing -4.7% vs -6.7%. The company possesses an impressive earnings surprise history, beating expectations in all the trailing four quarters.
The Zacks analyst thinks U.S. Bancorp's prospects will likely get support from its solid business model, core franchise, lower tax rate, rising interest rate and diverse revenue streams. Also, its organic growth remains solid and will likely benefit from the improving economic scenario.
U.S. Bancorp remains well poised to grow through acquisitions. However, escalating expenses due to its ongoing investments in technology and likely increase in legal expenses remain concerns.
Enterprise Products’ shares have gained +13.6% over the past three months, outperforming the Zacks Oil Production Pipeline MLP industry advanced by +11.9%. Enterprise Products Partners boasts of an extensive network of pipeline that spreads across nearly 50,000 miles.
Importantly, the pipeline network is connected to every major U.S. shale play and provides services to producers and users of commodities by transporting gas, liquids and refined products. The Zacks analyst thinks Enterprise’s $5.1-billion pipeline of fee-oriented midstream projects will enable it to enjoy above-average growth in distributable cash flow (DCF) over the next two years, expanding its distribution coverage ratio.
However, turnaround-related costs from Seminole fractionators hurt Enterprise’s fractionation business. Also, the persistent rise in operating expenses has been affecting the partnership’s bottom line. Enterprise’s balance sheet is more levered than the industry it belongs to. Therefore, the stock warrants a cautious stance.
Other noteworthy reports we are featuring today include Intuitive Sherwin-Williams (SHW), PPL Corp. (PPL) and Cintas (CTAS).
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Today’s Must Read
The Zacks analyst likes the traffic increase due to strong demand for air travel. Efforts to modernize its fleet are also encouraging.
Per the Zacks analyst, Cimarex will significantly grow on the back of the oil resources acquired from Resolute Energy.
The Zacks analyst likes United Therapeutics’ efforts to develop new delivery mechanisms for Remodulin and expanded indications for other PAH drugs like Orenitram and Tyvaso amid increased competition.
Per the Zacks analyst, new store openings, expansion of online presence and strategic collaborations aid Advance Auto’s growth.
The Zacks analyst thinks Southwestern’s investments in high-return areas such as Appalachia are noteworthy.
Per the Zacks analyst, growing revenues driven by strong organic and inorganic growth has led to significant growth.
Per the Zacks analyst, Legg Mason’s strategic acquisitions have resulted in diversified product offerings and expansion in market share.
The Zacks analyst believes that massive oil equivalent reserves in the deepwater Gulf of Mexico will help W&T Offshore boost production volumes.
Per the Zacks analyst, Omnicell’s recently-inked deals for both the XR2 and the IVX Workflow products look strategic. The company continues to see solid uptake of Omnicell XT.
Per the Zacks analyst, HCP will likely gain from its efforts to improve portfolio quality and operator mix. Focus on medical office and life-science properties is also encouraging.
According to the Zacks analyst, higher raw materials costs and sizable charges related to the Valspar acquisition will weigh on Sherwin-Williams’ bottom line in 2019.
Per the Zacks analyst, stringent regulation, unplanned outages and high-debt levels amid rising interest rates are headwinds for PPL Corporation.
Per the Zacks analyst, Cintas’ revenue growth is being dampened by a rise in operating expenses due to increase in commodity costs. High debt level is putting pressure on the company’s profitability.
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U.S. Bancorp (USB): Free Stock Analysis Report
The Sherwin-Williams Company (SHW): Free Stock Analysis Report
PPL Corporation (PPL): Free Stock Analysis Report
Oracle Corporation (ORCL): Free Stock Analysis Report
Enterprise Products Partners L.P. (EPD): Free Stock Analysis Report
Cintas Corporation (CTAS): Free Stock Analysis Report
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