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Top Research Reports for Caterpillar, Royal Dutch Shell & Goldman Sachs

Mark Vickery

Tuesday, June 25, 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), Royal Dutch Shell (RDS.A) andGoldman Sachs (GS). 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 (+7.7% vs. +7.6%) over the past six months. The Zacks analyst thinks that continued strength in its end markets, robust backlog and focus on cost control is likely to drive results.

For the Construction Industries segment, improvement in residential and non-residential construction in North America, and infrastructure demand is likely to aid revenues. Global economic momentum and increasing commodity prices is restoring miners’ profitability and they are resuming capital spending which bodes well for the Resource Industries segment. Investments in expanded offerings and services, and digital initiatives like e-commerce will also fuel growth.

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

Shares of Royal Dutch Shell have outperformed the Zacks Integrated Oil industry in the year to date period, gaining +13.0% vs +9.2%. The Zacks analyst thinks Royal Dutch Shell’s upstream unit profit has rebounded strongly over the past few quarters, while the integrated gas business — consisting of BG Group activities — impressed on the back of pricing gains.

Notably, the Anglo-Dutch company's position as a key supplier of liquefied natural gas should benefit its long-term cash flow growth on the back of attractive growth opportunities. However, there are apprehensions that Royal Dutch Shell's disposal program could affect crude production, which was down 2% year over year in 2018.

(You can read the full research report on Royal Dutch Shell here >>>).

Goldman Sachs’ shares have gained 3.6% in the last three months, outperforming the Zacks Financial - Investment Bank industry, which has lost -1.7% over the same period. The Zacks analyst believes Goldman’s well-diversified business and focus to capitalize on growth opportunities through strategic moves will continue to strengthen the overall business.

Additionally, cost-control efforts are commendable. Notably, the bank has announced a deal to acquire United Capital Financial Partners, a boutique wealth-management firm.

Recently, the bank has cleared the 2019 stress test and awaits capital plan approval. However, Goldman has been embroiled in the scandal related to the multibillion-dollar 1Malaysia Development Bhd (1MDB), which is a major concern.

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

Other noteworthy reports we are featuring today include Newmont Mining (NEM), Barrick Gold (GOLD) and Centene Corporation (CNC).

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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) Bets on Improving Markets Amid High Costs

Royal Dutch Shell (RDS.A) to Gain from Growing LNG Demand

Goldman (GS) Exhibits Cost Control; Legal Issues Linger

Featured Reports

Capital Investment on Infrastructure to Aid PPL Corp. (PPL)

Per the Zacks analyst, PPL Corporation will gain from its capital investment plan that focuses on infrastructure projects for generation, transmission and distribution.

Investment & Customer Growth Aids American Water Works (AWK)

The Zacks analyst believes American Water Works planned investment of $8-$8.6B from 2019 through 2023 and customer addition via organic and inorganic ways will boost performance.

Passenger Revenues Aid United Continental (UAL), Debts Ail

The Zacks analyst likes the uptick in passenger revenues on the back of strong demand for air travel.

Growth Projects Aid Newmont Goldcorp (NEM) Amid Cost Woes

While the company faces headwind from high production costs, it should gain from investment in its growth projects and efforts to improve efficiency, per the Zacks analyst.

Debt Reductions, Randgold Acquisition Aid Barrick (GOLD)

While Barrick faces challenges from higher production costs, it should gain from its actions to cut debt and synergies of the Randgold buyout, per the Zacks analyst.

Royalty Income Aids Viper Energy (VNOM), Gathering Cost High

The Zacks analyst appreciates Viper Energy's strong royalty income from mineral interests in U.S. oil basins. However, higher gathering & transportation costs will hurt the partnership's bottom line.

Strategic Initiatives Aid Centene (CNC), High Costs Hurt

Per the Zacks analyst, a number of acquisitions such as that of Fidelis Care and MHM Services poise the company well for growth. However, elevated expenses remain a concern.

New Upgrades

Strong Insurance Business, Pricing Aids W.R. Berkley (WRB)

Per the Zacks analyst, W.R. Berkley is set to grow on increasing contribution from Insurance business, improved pricing, increasing premium growth from the international unit and solid balance sheet.

RoseRock Buyout, Rising Baby Boomers to Aid Amedisys (AMED)

The Zacks analyst is bullish on Amedisys' expanding customer base through strategic buyouts like RoseRock. Aging U.S. population and home health as a cheaper care modality are other growth drivers.

Positive Rate Outcome and Investment Aid Atmos Energy (ATO)

Per Zacks analyst, Atmos Energy's $9-$10B investment in next five years and 99% of its capital outlay generating returns within 12 months gives visibility to its future performance.

New Downgrades

High Operating Expenses & Competition Hurt Skyworks (SWKS)

Per the Zacks analyst, escalating operating expenses is a major headwind. Further, significant pricing pressure, stiff competition from peers and high concentration risks remain a concern.

JAKKS Pacific's (JAKK) Sales Hurt by Toys 'R' Us Liquidation

The Zacks analyst believes that the liquidation of Toys "R" Us, the last major chain fully dedicated to selling toys is substantially hurting JAKKS Pacific's topline.

Antero Midstream (AM) Hurt by Debt Load & Low Cash Balance

Per the Zacks analyst, Antero Midstream's balance sheet reflects weakness, given only $2 million cash and $2.4 billion debt. This can constrain the company's financial flexibility.

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Royal Dutch Shell PLC (RDS.A) : Free Stock Analysis Report
Newmont Mining Corporation (NEM) : Free Stock Analysis Report
The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
Centene Corporation (CNC) : Free Stock Analysis Report
Caterpillar Inc. (CAT) : Free Stock Analysis Report
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