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Top Stock Reports for Facebook, United Technologies & United Parcel Service

Mark Vickery

Friday, July 26, 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 Facebook (FB), United Technologies (UTX) andUnited Parcel Service (UPS). 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 >>>

Facebook’s shares have gained +53.1% year to date, outperforming the S&P 500’s increase of +18.1% during the same period. Facebook reported strong second-quarter 2019 results, driven by continued user growth across all regions. Asia-Pacific remained its fastest growing region, driven by growth in India, Indonesia and the Philippines.

The company benefited from solid mobile ad revenues, owing to impressive growth in Instagram Stories and Feed, and Facebook News Feed. Interactive The Zacks analyst thinks stories ads on Instagram are likely to lead to better interaction among people, businesses and advertisers.

Moreover, strong sales of Oculus Quest and Rift S drove payment revenues. However, a persistent mix shift toward Stories is anticipated to hurt ARPU. Also, the company’s rising regulatory headwinds, including the antitrust investigations, are a concern.

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

Shares of Outperform-rated United Technologies have gained +18.5% in the past six months, outperforming the Zacks Diversified Operations industry, which has increased +16.3% over the same period. United Technologies’ second-quarter 2019 earnings and revenues surpassed expectations by 7.8% and 0.9%, respectively.

The Zacks analyst thinks strength in commercial aftermarket and military businesses coupled with high defense spending in the United States is likely to boost revenues of the company’s aerospace business. Also, favorable mix in Otis new equipment orders is likely to be a tailwind for the commercial business.

For 2019, United Technologies has revised its earnings view upward to $7.90-$8.05 per share from the prior guidance of $7.80-$8.00. Notably, the company’s cost cutting and operational excellence initiatives are likely to boost its profitability. Further, the Rockwell Collins buyout is likely to boost sales in 2019.

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

United Parcel Service’s shares have outperformed the Zacks Transportation - Air Freight and Cargo industry year to date, gaining +21.2% vs. +16.8%. UPS reported better-than-expected earnings and revenues in second-quarter 2019. Both metrics also improved year over. Results were aided by an uptick in demand related to domestic shipments from e-commerce shippers.

The Zacks analyst thinks e-commerce growth is a huge positive for UPS, which expects cross-border e-commerce volume to grow by 28% during the 2019-2021 periods. The company’s efforts to reward its investors through dividends and buybacks are also impressive.

However, UPS' high capital expenditures are worrisome and might hamper bottom-line growth going forward. Trade tensions with China also poses a threat to UPS' growth. The company's high debt-equity ratio is another concern.  

(You can read the full research report on United Parcel Service here >>>).

Other noteworthy reports we are featuring today include Raytheon (RTN), Amphenol (APH) and Rogers Communications (RCI).

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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

Expanding User Base, Instagram Strength Aids Facebook (FB)

Strong Aerospace Business Drives United Technologies (UTX)

E-Commerce, Dividends & Buybacks Aid UPS, High Capex a Woe

Featured Reports

Record Bookings to Aid Raytheon (RTN), Rising Costs Woe

Per the Zacks analyst, record bookings for its products should boost Raytheon's revenue growth potential.

Weak End-Markets, Economic Volatility to Hurt Amphenol (APH)

Per the Zacks analyst, geopolitical uncertainty, particularly related to the U.S.-China relationship, and a sluggish macro-economic environment in China doesn't bode well for the company.

Wireless & Cable Growth Aids Rogers Communications (RCI)

Per the Zacks analyst, solid postpaid subscriber gain in the wireless segment and increasing Internet user count in the Cable segment are benefiting Rogers Communications.

Expansion Plans Aids Edison International (EIX), Costs Hurt

Per the Zacks analyst, focus on infrastructural development programs will boost top line, going ahead. Inability to recover uninsured wildfire-related costs may affect its financial condition.

Investments in E-Commerce Aid Grainger (GWW), Costs Ail

Per the Zacks analyst, Grainger will benefit from investments in e-commerce and digital capabilities and focus on strengthening its customer base in the United States despite inflated costs.

Expanding Customer Base & Cloud Adoption Aid Citrix (CTXS)

Per the Zacks analyst, Citrix benefits from robust demand for desktop virtualization solutions & rising customer base.

Interpublic (IPG) Rides on Organic Growth, Debt Woes Persist

The Zacks analyst is impressed by Interpublic's strategy to expand its portfolio, global presence and top line with the help of multiple acquisitions.

New Upgrades

Solid Prospects in Core Oncology Segment Drives Varian (VAR)

Varian has been consistently witnessing significant contribution from its core Oncology unit. The Zacks analyst is also bullish about the company???s impressive show in EMEA and China recently.

Increasing Commission and Fees Drives Brown & Brown (BRO)

Per the Zacks analyst, Brown & Brown is poised for growth banking on increasing commission and fees that in turn is driving revenues as well as aiding margin expansion.

Strength in Commercial Business Aids First American (FAF)

Per the Zacks analyst, First American Financial is poised for growth given strength in commercial business given strengthening of the purchase market, driving substantial growth in refinance activity.

New Downgrades

Rising Costs are Likely to Keep Hurting Lamb Weston (LW)

Per the Zacks analyst, high input, transportation and manufacturing costs are hurdles for Lamb Weston. Such rises, which hurt gross margin in fourth-quarter 2019, are likely to persist in fiscal 2020.

Increasing Costs to Hurt Cohen & Steers' (CNS) Profitability

Per the Zacks analyst, persistently increasing expenses, primarily because of higher compensation costs, along with investments in franchise are expected to hurt Cohen & Steers' bottom-line growth.

Higher Tariff & Promotional Costs to Hurts iRobot (IRBT)

Per a Zacks analyst, iRobot will suffer from higher tariff costs related to implementation of 25% tariffs on Chinese imports in May. Also, high promotional costs are worrying.

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United Technologies Corporation (UTX) : Free Stock Analysis Report
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
Raytheon Company (RTN) : Free Stock Analysis Report
Rogers Communication, Inc. (RCI) : Free Stock Analysis Report
Facebook, Inc. (FB) : Free Stock Analysis Report
Amphenol Corporation (APH) : Free Stock Analysis Report
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