Top Analyst Reports for Caterpillar, General Motors & Citigroup

Tuesday, September 10, 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 Caterpillar (CAT), General Motors (GM) and Citigroup (C). 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 >>>

Caterpillar’s shares have outperformed the Zacks Construction and Mining industry (0.2% vs. 0.1%) in the year-to-date period. The Zacks analyst thinks that Caterpillar’s global machine sales growth rate has been on a downward spiral over the past few months, which is concerning.

Notably, the company’s July global retail sales growth of 4% was marked as the lowest so far this year. The company anticipates earnings per share on the lower end of its guidance of $12.06-$13.06 and sales growth to be modest for 2019. In the Construction Industries segment, North America will likely aid growth while China will be a headwind.

Improving commodity prices will support capital expenditure in the mining sector, which will drive the Resource Industries segment. Investments in expanded offerings and services, and digital initiatives like e-commerce will also fuel growth. Its cost-reduction efforts will help sustain margins despite material cost inflation owing to tariffs.

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

Shares of General Motors have outperformed the Zacks Domestic Automotive industry over the past six months, gaining 2.5% vs -2%. The Zacks analyst believes that strong demand for profitable trucks and SUVs is aiding General Motors’ revenues.

The company’s hot-selling brands in America like Chevrolet Silverado, Equinox and GMC Sierra are driving the top line. The firm is increasing capacity investment in emerging markets to enhance global sales, and is undertaking several initiatives to make its vehicles more advanced, safer and fuel efficient.

However, high cost of raw materials and rising tariffs amid heightening U.S.-Sino trade tiff may put pressure on the firm’s profitability. As it is, the company’s negative free cash flows and high debt load are causes of worry. Further, frequent recalls act as a headwind. As such, investors are recommended to wait for a better entry point.

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

Citigroup’s shares have gained 10.4% over the past six months, outperforming the Zacks Major Regional Banks industry, which has gained 2.6% over the same period.

The Zacks analyst believes that Citigroup’s streamlining efforts, along with strategic investments in core business, bode well for the long term. Also, a declining cost base supports its bottom-line improvement.

Steady capital-deployment activities are also commendable. However, pending litigation issues might keep legal expenses elevated. Further, decline in fee income is a concern for the company. Recently, at an investors' conference, chief financial officer Mark Mason commented that trading and investment banking revenues are expected to decline in third-quarter 2019. Further, NII outlook has also been lowered amid more Fed rate cut expectations.

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

Other noteworthy reports we are featuring today include Eli Lilly (LLY), Northrop Grumman (NOC) and Walgreens Boots Alliance (WBA).

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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

Caterpillar (CAT) Rides on Improving Markets Amid High Costs

General Motors (GM) to Ride on High Demand for Trucks & SUVs

Expense Control Aids Citigroup (C), Low Fee Income A Woe

Featured Reports

Las Vegas Sands (LVS) Banks on Macao Business to Drive Growth

The Zacks analyst believes that Las Vegas Sands' planned investment in new capital projects in Macao and higher revenues from The Parisian Macao are also likely to drive growth.

Growth in Retail Pharmacy USA Division Aids Walgreens (WBA)

The Zacks analyst is bullish about the Retail Pharmacy USA division of Walgreens witnessing comparable prescription growth.

Solid Pension Risk Transfer Business Aids Prudential (PRU)

Per the Zacks analyst, Prudential is set to grow on solid pension risk transfer business, momentum in U.S. Financial Wellness and international operations.

Under Armour (UAA) Lackluster North America Sales a Concern

Per the Zacks analyst, sluggish sales from North American region due to declines in both wholesale and direct-to-consumer businesses remains a drag for Under Armour's top line.

Solid Product Demand Aid Stanley Black (SWK), Cost Woes Ails

Per a Zacks analyst, Stanley Black (SWK) gains from solid demand for products, including Craftsman, Lenox, Irwin and DeWalt FlexVolt.

New Drugs to Drive Lilly's (LLY) Sales Amid Generic Pressure

Per the Zacks analyst, higher demand for newer drugs should drive Lilly's sales in the second half amid generic competition for drugs like Cialis, rising pricing pressure and currency headwinds.

Investments Aid Northrop (NOC), High Operating Expenses Hurt

Per the Zacks analyst, Northrop Grumman's recent capital investment worth $1,249 million will surely bolster the company's growth prospects in the near future.

New Upgrades

Fortinet (FTNT) Rides on Strong Demand for Security Fabric

Per the Zacks analyst, Fortinet is benefiting from strong global demand for Security Fabric offerings which is aided by digital transformation and security refresh cycle across most industries.

Garmin (GRMN) Benefits From Strong Products & Acquisitions

Per the Zacks analyst, Garmin will continue to gain from new products introductions, continued innovation and market expansion efforts in all business segments. Also, Tacx buyout will aid results.

Group 1 Automotive (GPI) Rides on Used Retail Units & Buyouts

Per the Zacks analyst, Group 1 Automotive will gain from strong performance of used vehicles as well as aftersales units. Moreover, acquisition in growth markets should drive its long-term growth.

New Downgrades

High Costs and Lack of Diversification Impact Comerica (CMA)

Per Zacks analyst, Comerica's escalating expenses due to rising salaries and benefits expense remain a concern. Also, lack of diversification in the loan portfolio acts as a headwind for the company.

Weak Distributors Demand Hurt Vishay Intertechnology (VSH)

Per the Zacks analyst, slowdown in the demand from distributors due to high level of inventories in supply chain is hurting Vishay Intertechnology's diodes and, resistors and inductors segments.

Stericycle (SRCL) Grapples With Declining CRS businesses

The Zacks analyst is worried about the top line being hurt by weak Communication and Related Services (CRS) business due to decline in recall events and lower call volumes in communication solutions.

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Walgreens Boots Alliance, Inc. (WBA) : Free Stock Analysis Report
 
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
 
Eli Lilly and Company (LLY) : Free Stock Analysis Report
 
General Motors Company (GM) : Free Stock Analysis Report
 
Caterpillar Inc. (CAT) : Free Stock Analysis Report
 
Citigroup Inc. (C) : Free Stock Analysis Report
 
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