Top Analyst Reports for Netflix, Texas Instruments & Constellation Brands

Tuesday, October 17, 2017

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 Netflix (NFLX), Texas Instruments (TXN) and Constellation Brands (STZ). 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 >>>

Buy-rated Netflix shares have vastly outperformed the Zacks Broadcasting industry, gaining +70.6% vs. +20.4% in the past one year. Netflix third-quarter results benefited from content strength that helped in expanding international subscriber base. The company’s efforts to attract viewers through investing in more regional programming resulted in better-than-expected net addition of subscribers.

The company remains confident of adding more subscribers as the trend of binge viewing is catching up fast. The Zacks analyst likes Netflix’s continuing subscriber additions and expanding content portfolio, and thinks these are the key catalysts that will help Netflix to sustain growth going forward. However, higher investments on original/acquired content will continue to hurt profitability, at least in the near term.

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

Shares of Texas Instruments have gained +29.1% year to date, underperforming the Zacks General Semiconductor industry which has gained +32.8% over the same period. Texas Instruments is one of the largest suppliers of analog integrated circuits.

The Zacks analyst expects margin expansion to continue driven by the secular strength in the auto and industrial markets, a stronger mix of analog and embedded processing products, benefits of restructuring initiatives and more than 300mm capacity coming online. Moreover, the company recently announced a 24% dividend hike and an additional $6 billion share buyback.

These moves reflect the company's solid cash flow generation ability and balance sheet strength. The only negative at this point appears to be intensifying competition, particularly for auto chips, given recent market consolidation. There is also the question of negative currency effect and a high debt load.

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

Buy-rated Constellation Brands shares have gained more than +37.2% year to date, exceeding the performance of the Zacks Alcoholic Beverages industry, which has gained +24.9% over the same period. The Zacks analyst likes the company’s superb surprise history and constant brand-building efforts.

The company showcased another sterling performance in second-quarter fiscal 2018, marking its 17th straight quarter of year-over-year earnings growth and 12th straight positive surprise. Constellation Brands benefited from efforts to drive consumer demand for its robust brand portfolio.

Results were also aided by contributions from acquisitions along with continued strength particularly in the beer business. This, along with strength in the beer business, led it to raise earnings outlook for fiscal 2018 and operating income target for the beer segment. However, stiff competition and higher taxes remain concerns.

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

Other noteworthy reports we are featuring today include Wells Fargo (WFC), Alibaba (BABA) and Phillips 66 (PSX).

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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

Subscriber Additions, Expanding Content Drives Netflix (NFLX)

Competition in Auto Chips Ails Texas Instruments (TXN)

Constellation Brands (STZ) Reaping Brand-Building Benefits

Featured Reports

Intermodal Volumes Buoy J.B. Hunt (JBHT), High Costs Ail

The Zacks analyst is impressed by the growth in volumes at the company's flagship intermodal division.

Soft Jet Demand Remains a Concern for Parker-Hannifin (PH)

Per the Zacks analyst, soft demand for business jets, prolonged weakness in the natural resources market, and escalating restructuring charges could restrict Parker-Hannifin's growth, going forward.

Rising Expenses Weighs on Alibaba's (BABA) Grocery Push

Per the Zacks analyst, Alibaba's mobile commerce market strength and grocery push is likely to be offset by increasing costs associated with new businesses initiatives.

Garmin (GRMN) Grapples with Secular Decline in PND Business

The Zacks analyst notes that secular decline in the personal navigation device (PND) business will remain a big drag on the Garmin's earnings and revenues.

Wyndham's (WYN) Solid Marketing Efforts Fight Falling RevPAR

Per the Zacks analyst, Wyndham's solid marketing strategies along with prudent acquisitions are guarding the company from the effects of declining revenue per available room (RevPAR).

Phillips 66's (PSX) Debt Load Offset by Chemical Unit Focus

The Zacks analyst believes that concerns regarding Phillips 66's high debt load will be offset by the company's focus on more profitable business units like Midstream and Chemicals.

Vehicle Recall Issues, Penalties Weigh on Toyota (TM)

Per the Zacks analyst, frequent recalls are not only tarnishing Toyota image, but also raising costs & lowering vehicle resale value.

New Upgrades

Increased Drilling Activities, Capital Plans Aid ONEOK (OKE)

Per the Zacks analyst, increased drilling activities due to lower break-even costs will boost demand for ONEOK's midstream services. Its investment projects in natural gas pipeline also buoy optimism.

EndoPredict & GeneSight to Aid Myriad's (MYGN) Topline in Q1

Per the Zacks analyst, EndoPredict and GeneSight testing may again act as major contributors to Myriad Genetics' topline this Q1. Slew of new product launches should also add to the company's growth.

Jacobs (JEC) Eyes Growth on CH2M Buyout & Contract Wins

The Zacks analyst believes new contracts and bold restructuring moves will boost Jacobs' near-term results. The company intends to become a $15-billion global solutions provider with the CH2M buyout.

New Downgrades

Rising Expenses and Legal Issues Hurt Wells Fargo (WFC)

Per the Zacks analyst, Wells Fargo's bottom line remains impacted in the absence of improvement in cost management and tepid loan growth. Moreover, retail sales practices' scam remains a concern.

Rising Costs Impact First Republic's (FRC) Bottom-line Growth

Per Zacks analyst, First Republic's bottom-line remains under pressure due to continued rise in expenses through investments in digital initiatives like mobile banking applications and data analytics.

Cat Loss Exposure Continues to Hurt Arch Capital (ACGL)

Per the Zacks analyst, catastrophe losses, which weighs on underwriting results, will continue to render volatility to Arch Capital's earnings.

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Wells Fargo & Company (WFC) : Free Stock Analysis Report
 
Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
 
Constellation Brands Inc (STZ) : Free Stock Analysis Report
 
Phillips 66 (PSX) : Free Stock Analysis Report
 
Netflix, Inc. (NFLX) : Free Stock Analysis Report
 
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
 
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