Top Stock Reports for IBM, Honeywell & American Express

Monday, April 22, 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 IBM (IBM), Honeywell (HON) and American Express (AXP). 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 >>>

IBM’s shares have underperformed the broader market in the last year, losing -3.8% vs. the S&P 500’s +8.3% gain. The Zacks analyst thinks IBM is benefiting from operating efficiency, cost cutting and lower share count.

Moreover, the company’s improving position in the hosted cloud, security, blockchain and analytics domains bodes well. IBM is witnessing growth in industry verticals like health, retail and banking. Solid adoption of Watson Health and broad-based growth in Payer, Provider, Imaging and Life Sciences domains is notable.

However, the Storage hardware segment is facing stiff competition. Additionally, IBM’s ongoing business model transition to cloud is time-consuming, which is likely to be a headwind. Further, ballooning debt levels have been troubling IBM lately.

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

Shares of Buy-ranked Honeywell have outperformed the Zacks Diversified Operations industry in the past six months, gaining +12.3% vs. a +6.2% increase. In first-quarter 2019, Honeywell's earnings increased year over year and also exceeded expectations.

The Zacks analyst thinks Honeywell’s strength in its commercial aerospace, warehouse and process automation’s businesses as well as solid demand for its commercial fire and security products will boost revenues in the quarters ahead. Stronger sales volumes, increased productivity and ongoing commercial effectiveness actions will likely improve near-term profitability.

For 2019, Honeywell raised earnings guidance from $7.80-$8.10 to $7.90-$8.15 per share. A strong cash position and focus on rewarding shareholders handsomely through dividends and share repurchases will work in its favor. Also, the company has been witnessing solid activity on the earnings estimate revision front, reflecting bullish sentiment.

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

American Express’ shares are up +13% over the past year, outperforming the Zacks Financial Miscellaneous Services industry, which has declined -7% over the same period. American Express’ first-quarter earnings beat expectations and grew year over year, led by higher-than-expected billings and loan growth.

The Zacks analyst likes the company’s solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments. It continues to witness strong loan growth and credit metrics. Its expanding presence in the business to business market and investment in technology should drive long term growth. However, it faces an increase in reward expenses, led by enhancements of its U.S. platinum products.

Cost of card member services has been increasing over the past three years and it continued to elevate this year as well, reflecting higher engagement levels across its premium travel services. It has also been witnessing an increase in the provision of loan losses.

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

Other noteworthy reports we are featuring today include Becton, Dickinson (BDX), CSX Corp (CSX) and Progressive Corp (PGR).

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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

Adoption of Cloud, Security & Analytics Solutions Aid IBM

Strong Aerospace Segment Drives Honeywell's (HON) Revenues

Solid Balance Sheet, Rising Revenues Aid American Express (AXP)

Featured Reports

Technology, DARTs Aid Interactive Brokers (IBKR), Costs Rise

Per the Zacks analyst, Interactive Brokers' focus on developing of proprietary software have resulted in increase in revenues and daily average revenue trades (DARTs). Yet rising costs is a concern.

New Products Aid Textron (TXT), Poor Cash Flows Hurt

Per the Zacks analyst, the new product launch will significantly expand Textron's share in the all-terrain vehicles (ATVs) industry. However, the company is witnessing poor cash flow performance.

Robust Demand for InfiniBand Solutions Aids Mellanox (MLNX)

Per the Zacks analyst, Mellanox is benefiting from robust demand for ethernet adapters, switches and LinkX cables.

Texas Capital (TCBI) Exhibits Organic Growth, High Costs A Woe

The covering analyst thinks Texas Capital continues to gain from organic growth aided by rising loans and deposits.

Organic Growth, Strategic Acquisitions Aid Jones Lang (JLL)

Per the Zacks analyst, strategic acquisitions and investments will help bolster Jones Lang's capital markets business and generate cash flows that would aid in steady deleveraging.

New Program Wins, Global Expansion Benefits Plexus (PLXS)

According to the Zacks analyst, Plexus benefits from new program wins in manufacturing and engineering solutions along with international expansion.

Strong Demand Aids AAR (AIR), Labor Shortages Hurt

Per the Zacks analyst, AAR Corp. enjoys strong position in the global aviation market given rising demand in the commercial sphere.

New Upgrades

ADTRAN (ADTN) Rides on Solutions Portfolio & Diversification

Per the Zacks analyst, ADTRAN should gain from rise in customer engagements across its portfolio of software-defined access. Its strategy of diversification across geographies and markets is laudable.

Solid Policies in Force, Better Rates Aid Progressive (PGR)

Per the Zacks analyst, Progressive is set to grow banking on portfolio expansion, solid policies in force, better rates and leadership position in product, service and distribution innovation.

CSX Buoyed by Volume Growth, Pricing Gains & Lower Costs

The Zacks analyst is impressed by the growth in volumes and favorable pricing. Efforts to reduce costs and reward shareholders also raise optimism in the stock.

New Downgrades

Raw Material Pricing Pressure to Hurt Becton, Dickinson (BDX)

Per the Zacks analyst, resin price rise due to a supply-constrained market can result in raw material pricing pressure, thereby weighing on Becton, Dickinson's margins.

Higher Material & Logistics Expenses Hurt Masco (MAS)

Per the Zacks analyst, higher raw material and Enterprise Resource Planning costs, as well as logistics expenses pose significant threats to the company's margins.

Investments in Representatives to Hurt Avon's (AVP) Margins

Per the Zacks analyst, higher cost of investments in representatives, sales leaders and field expenses are hurting Avon's margins. These investments should continue to hurt near-term profitability.

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The Progressive Corporation (PGR) : Free Stock Analysis Report
 
International Business Machines Corporation (IBM) : Free Stock Analysis Report
 
Honeywell International Inc. (HON) : Free Stock Analysis Report
 
CSX Corporation (CSX) : Free Stock Analysis Report
 
Becton, Dickinson and Company (BDX) : Free Stock Analysis Report
 
American Express Company (AXP) : Free Stock Analysis Report
 
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