Earnings Season Scorecard and Analyst Reports for Mastercard, Comcast & Others

Thursday, February 13, 2020

This write-up aims to present the best research output of our analyst team. In addition to featuring 16 fresh research reports issued by analysts this morning, including on Mastercard (MA), Comcast (CMCSA) and Honeywell International (HON), we are also giving you a real-time update on the ongoing Q4 earnings season. The 16 research reports featured below 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 >>>

Q4 Earnings Season Scorecard

Including the 15 S&P 500 members that reported Q4 results before the market's open today, we now have quarterly results from 380 index members or 76% of the index's total membership. Total earnings or aggregate net income for these 380 index members are up +1% from the same period last year on +4.8% higher revenues, with 72.4% beating EPS estimates and 66.6% beating revenue estimates. 

Except for the EPS beats percentage (72.4%), these Q4 results represent a notable improvement over what we saw from this same group of 380 index members in the first three quarters of 2019. 

Last evening's weak showing from Cisco (CSCO) notwithstanding, Q4 results have been notably strong from the Technology sector, the biggest earnings contributor to the S&P 500 index. With results from 90.1% of the sector's total market capitalization in the index already, Q4 earnings for the sector are up +5.8% from the same period last year on +5.7% higher revenues. 

For more details about the Q4 earnings season and expectations for the current and coming periods, please check out our weekly Earnings Trends report >>> A Positive Earnings Picture 

Mastercard’s shares have outperformed the Zacks Financial Transaction Services industry over the past year (+51.8% vs. +41.9%). The Zacks analyst believes that the company is benefiting from shifts in payments, from physical to digital. Investment in technology has also kept the company at the forefront of the rapidly changing payments industry.

Mastercard’s earnings of $1.96 per share beat the Zacks Consensus Estimate by 4.81% and grew 26% year over year. Results reflected higher switched transactions, increase in cross-border volume and gross dollar volume, and gains from acquisitions. Increase in rebates and incentives year over year was a partial dampener.

However, escalating costs might put pressure on margins. In order to gain customers and new business, Mastercard has been incurring high levels of costs under rebates and incentives, which remain a concern. 

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

Shares of Comcast have gained +8.1% in the past six months against the Zacks Cable Television industry's rise of +16.7%. The Zacks analyst believes that the weakness in Broadcast television and Filmed Entertainment segments negatively impacted NBCUniversal revenues.

Comcast’s fourth-quarter 2019 results were driven by Cable’s solid performance. The segment benefited from an expanding residential high-speed Internet customer base and business services user base. The company’s results also reflected the growing popularity of Xfinity products. Moreover, expansion in the wireless user base drove results.

Further, Theme Parks revenues grew in the reported quarter. Sky’s top-line growth benefited from higher Direct-to-consumer and Content revenues. The company continued to lose video subscribers due to cord-cutting. Moreover, the balance sheet remains significantly leveraged, which is a concern.

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

Honeywell’s shares have gained +0.1% over the past three months against the Zacks Diversified Operations industry's rise of +6.8%. The Zacks analyst believes that that strength in its defense, commercial aerospace, process solutions as well as solid demand for its commercial fire products will boost revenues in the quarters ahead.

Stronger sales volume, increased productivity and operational excellence initiatives are likely to improve its near-term profitability. Also, the company is committed to rewarding shareholders handsomely through dividend payouts and share buybacks.

Also, the company is experiencing softness in its productivity products business. Given Honeywell’s extensive geographic presence, its business is subject to political, economic and geopolitical issues. Rise in debt levels can increase the company’s financial obligations. Analysts have become bearish on the company in the past 30 days

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

Other noteworthy reports we are featuring today include QUALCOMM (QCOM), Cigna (CI) and Dominion Energy (D).

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

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

Revenue Growth, Solid Balance Sheet Aid Mastercard (MA)

High Speed Internet Subscriber Gain Benefits Comcast (CMCSA)

Aerospace Segment Drives Honeywell (HON), High Debt Hurts

Featured Reports

Qualcomm (QCOM) Rides on Solid Demand Trends for 5G Chip

Per the Zacks analyst, Qualcomm is focusing to retain leadership in the 5G chipset market and mobile connectivity with innovative product launches.

Express Scripts Acquisition, Revenue Growth Aid Cigna (CI)

Per the Zacks analyst, the buyout of Express Scripts has diversified Cigna's operations opening up new revenue streams; increasing membership superior products and services have led to revenue growth.

Dominion (D) Gains from Investment, Share Dilution a Concern

Per the Zacks analyst Dominion's plans to invest $26B to strengthen its infrastructure in the next five years will boost performance but share dilution could adversely impact its earnings.

Micron (MU) Banks on Rebound in Demand for DRAM Solutions

Per the Zacks analyst, Micron is benefiting from the revival in DRAM demand on the back of a progress in customer inventory adjustments in the cloud, graphics and the PC markets.

ConocoPhillips (COP) Gains from Oil-Rich Eagle Ford Acreage

The Zacks analyst believes that huge acreage holdings in the prospective Eagle Ford Shale play will drive ConocoPhillips' production.

Acquisitions Benefit Humana (HUM) Despite Rise in Costs

Per the Zacks Analyst, a series of buyouts have helped Humana to expand its business and achieve long-term growth.

Restructuring Plan Aids Molina (MOH), Low Membership Hurts

Per the Zacks analyst, its restructuring initiative has helped in streamlining its organizational structure to improve efficiency and control costs.

New Upgrades

Label Expansion of Eylea, Dupixent Boost Regeneron (REGN)

Per the Zacks analyst, label expansions of blockbuster drug Eylea and asthma drug Dupixent drive growth for Regeneron. The company's efforts to develop its pipeline is encouraging as well.

S&P Global (SPGI) Benefits From Canadian Enerdata Buyout

Per the Zacks analyst, the Canadian Enerdata acquisition enhances S&P Global's energy analytical capabilities and strengthens its foothold in North American natural gas market.

Western Digital (WDC) Rides on High-Capacity HDD Adoption

Per the Zacks analyst, Western Digital is expected to gain from growing clout of higher capacity drives. Further, expansion of Ultrastar HDD family with capacities of 20 TB and 18 TB HDDs bodes well.

New Downgrades

Xylem (XYL) Hurt by Weak Industrial & Commercial Markets

Per the Zacks analyst, Xylem's orders continue to suffer due to weakness in the shorter cycle industrial end market. Softness related to timing of sales in the commercial end market remains a concern.

Expanded Import Tariff, 737 Max Issue to Hit Hexcel (HXL)

Per the Zacks analyst, extended import tariff on aluminum might raise input cost for Hexcel Corp. Uncertainty surrounding 737 Max program has forced it to offer conservative financial expectation.

Import Tariff, Price Volatility Hit Triumph Group (TGI)

Per the Zacks analyst, extended import tariff on aluminum might raise input cost for aerospace and defense equipment stocks like Triumph Group. Volatile commodity prices tend to hurt its margins.

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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
 
Mastercard Incorporated (MA) : Free Stock Analysis Report
 
Honeywell International Inc. (HON) : Free Stock Analysis Report
 
Dominion Energy Inc. (D) : Free Stock Analysis Report
 
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
 
Comcast Corporation (CMCSA) : Free Stock Analysis Report
 
Cigna Corporation (CI) : Free Stock Analysis Report
 
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