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The Zacks Analyst Blog Highlights: Boeing, Microsoft, Amazon, Walmart and JPMorgan

For Immediate Release

Chicago, IL –February 14, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Boeing Company BA, Microsoft Corporation MSFTAmazon.com, Inc. AMZN, Walmart Inc. WMT and JPMorgan Chase & Co. JPM.

Here are highlights from Wednesday’s Analyst Blog:

5 Stocks That Prove Size Does Matter

After a sharp drop toward the end of 2018, the U.S. stock market recouped some of the losses and now the indexes have closed at their highest levels for 2019. But, whether the momentum will continue is nothing but guess work. After all, the S&P 500’s impressive 8% gain so far this year was primarily due to some solid earnings reports from high profile names like Facebook. But, we all know that there are serious underlying issues for Facebook, thanks to privacy and fake news controversies.

However, some may say that beyond this stock-specific issue, the broader market is poised to gain after lawmakers reached a deal to prevent another government shutdown and optimism also grew over a trade deal between the United States and China.

But beneath the surface, things are still dicey. President Trump did express his discontentment over the tentative agreement that allows 55 miles of new border fencing along the U.S.-Mexico border. Meanwhile, he said that he may hold off on raising tariffs provided the countries get close to a deal. So, there are a lot of ifs and buts. And how can we forget that the global economy is on the cusp of a slowdown this year.

It’s, thus, hard to predict whether the rally that began this year will stay. But, there are some mega-cap stocks that offer some respite at the moment. Their size, established business model and market dominance ensure that they weather whatever the market throws their way. These stocks are financially stable enough to counter a choppy equity market as well as cash on any uptrend. Have a look —

Boeing

The Boeing Company, with a market value of $230 billion and annual revenues worth of $100 billion, should be at the top of the list, especially, when the company claims it has an order of $500 billion, ensuring a secured position in the near future.

By the by, the firm is frequently at the top of the list of government contractors and the Trump administration’s interest to rebuild the U.S. military by bumping up Pentagon’s budget should certainly bode well for the company.

Boeing currently has a Zacks Rank #1 (Strong Buy). In the past 60 days, eight earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings rose 9.2% in the same period. You can seethe complete list of today’s Zacks #1 Rank stocks here.

The stock’s expected earnings growth rate for the current year is 23.4%, higher than the Aerospace - Defense industry’s gain of 10.2%. The company has outperformed the broader industry so far this year (+27.4% vs +18.8%).

Microsoft

Software giant Microsoft Corporation’s sheer dominance of enterprise market share is a positive. It is not only the largest U.S. company by market value, its Windows command an 87% share of PC operating system. At the same time, the company’s initiatives to become a more cloud-centric company and its shift from software licensing to a subscription model for its ever-present Office software has been working in favor for quite some time.

Microsoft, by the way, has made a number of high-profile cloud computing deals. These deals should boost profit margin and revenues. Microsoft announced a massive seven-year deal with Walgreens Boots Alliance, Inc. (WBA) to become its strategic cloud provider. Walgreens is planning to move most of its information technology infrastructure to Microsoft Azure. At the same time, supermarket chain Albertsons and an array of other regional grocers signed a three-year deal, making Azure their preferred platform.

The Zacks Rank #3 (Hold) company’s expected growth rate for the current year is 13.7%, more than the Computer - Software industry’s estimated rise of 9.9%. In fact, the company has been outperforming the broader industry in the past year (+17.7% vs +16.7%).

Amazon

With a market cap of more than $800 billion and a price of around $1,600 a share, Amazon.com, Inc. is among the three biggest companies in the United States. But, its dominance goes far beyond size. Almost half of online spending has gone through Amazon last year and that’s a healthy 5% share of the entire country’s retail spending. And that’s a staggering tally! To top it, leadership in the cloud computing segment and new product lines like Alexa have worked in favor of Amazon.

If this wasn’t enough, the Zacks Rank #3 company’s consensus estimate for current-year earnings has moved up 0.4% in the past 30 days.

The company’s expected earnings growth rate for the current year is 31.4%, in contrast to the Internet - Commerce industry’s projected decline of 7.9%. In fact, the company has been outdoing the broader industry in the past year (+12.9% vs -7.9%).

Walmart

Walmart Inc. tops the Fortune 500 with more than $500 billion in annual revenues and is also among the top 15 companies listed in the S&P 500. Needless to say, that it has a market value of more than $280 billion.

Having said that, it is at the top of the e-commerce business with a respectable 4% of total online retail spends. And at the same time, it generates $30 billion in annual operating cash flow, thereby dismissing talks about the e-commerce revolution disrupting the retail giant.

Walmart currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current fiscal-year earnings also rose 0.8% in the past 90 days.

The company’s expected earnings growth rate for the current year is 9.3%, in contrast to the Retail - Supermarkets industry’s estimated decline of 1.2%. The company has outperformed the broader industry on a year-to-date basis (+4.1% vs +3.4%).

JPMorgan Chase

Among banks, JPMorgan Chase & Co. is in a league of one’s own. The company, with a market cap of more than $340 billion, is ranked the top bank in terms of total assets and deposits, according to J.D. Power’s 2018 rankings. It is also judged to be the best bank in terms of customer satisfaction. Additionally, it is investing heavily in the next generation of banking technology and boasted 48 million active digital customers last year.

JPMorgan currently has a Zacks Rank #3. In the past 30 days, four earnings estimates moved north, while three moved south for the current year. The Zacks Consensus Estimate for earnings rose 0.7% in the same period.

The stock’s expected earnings growth rate for the current year is 10.4%, more than the Banks - MajorRegional industry’s gain of 7.6%. In fact, the company has been outdoing the broader industry in the past two-year period (+14.5% vs +1.2%).

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
JPMorgan Chase & Co. (JPM): Free Stock Analysis Report
 
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
The Boeing Company (BA): Free Stock Analysis Report
 
Microsoft Corporation (MSFT): Free Stock Analysis Report
 
Walmart Inc. (WMT): Free Stock Analysis Report
 
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