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Top Analyst Reports for Visa, T-Mobile & Union Pacific

Monday, January 18, 2021

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 Visa (V), T-Mobile US (TMUS) and Union Pacific (UNP). 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 >>>

Visa shares have modestly outperformed the Zacks Financial Transaction Services industry over the past year (-1.5% vs. -5.3%), but the stock has lagged the broader market as cross-border volumes have suffered as a result of Covid-related travel restrictions. That said, the Zacks analyst believes that numerous acquisitions and alliances paved the way for long-term growth and consistently drove revenues.

Technological upgrades via investments bode well for Visa. Shift in payments to the digital modes like mobile, cards, online and wearables bodes well for the long haul. The acquisition of Visa Europe is a strategic fit as well. The development of coronavirus vaccine and the gradual revival of consumer confidence will lead to an increase in spending which shoud aid the company's business volumes.

A strong balance sheet boosts inorganic growth and funding of capital expenditures. However, high operating expenses weigh on the operating margins. Ramped-up client initiatives will dent the top line. Also, a slowdown in cross-border business due to coronavirus looms on. 

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

T-Mobile shares have gained +19.9% in the last six months against the Zacks National Wireless industry’s gain of +3% on the back of steady market share gains. The Zacks analyst believes that low-priced plans for consumers and small enterprises have not improved the bottom line. Several promotional activities to lure customers from rivals have eroded its profitability.

Meanwhile, T-Mobile is optimistic about its ability to deliver $43 billion of synergies and achieve $6 billion of annualized savings from the Sprint merger. It has more than 100 million wireless customers and the largest 5G network in the United States. It overtook AT&T to become #2 in U.S. wireless. T-Mobile’s mid-band 5G network covers more than 30 million people.

It is expanding its Home Internet pilot extensively while preparing to launch the 5G Home Internet service in 2021. It intends to bring more competition to home broadband, especially in underserved rural markets. However, the company operates in a fiercely competitive and saturated U.S. telecom market.

(You can read the full research report on T-Mobile here >>>)

Union Pacific shares have gained +5.3% over the past three months against the Zacks Rail industry’s rise of +9.7%. The Zacks analyst expects Union Pacific's fourth-quarter performance to have been aided by the improving freight conditions in the United States.

Mainly owing to better freight revenues, the company expects December-quarter operating revenues to be $5.1 billion, above the $4.9 billion figure recorded in third-quarter 2020. Also, Union Pacific's efforts to control costs and ramp up efficiencies, courtesy of the precision scheduled railroading model, are expected to have boosted its bottom-line performance in the fourth quarter. Detailed results will be out on Jan 21.

Due to cost cuts, the company expects adjusted operating ratio (operating expenses as a % of revenues) to improve to 55.6% from 59% reported in the September quarter. However, tepid automotive demand might hurt fourth-quarter results. Deterioration in the debt-to-EBITDA ratio is an added woe.

(You can read the full research report on Union Pacific here >>>)

Other noteworthy reports we are featuring today include AstraZeneca (AZN), Lowe's Companies (LOW) and 3M Company (MMM).

These Stocks Are Poised to Soar Past the Pandemic

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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

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Sheraz Mian

Director of Research                                                                                                

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>>>

Featured Reports

Cancer Drugs Push AstraZeneca's (AZN) Sales, Pipeline Solid

The Zacks analyst says that AstraZeneca's cancer drugs, Lynparza, Tagrisso and Imfinzi, should keep driving revenues. Its pipeline is strong with several phase III data readouts lined up.

Lowe's (LOW) Omnichannel, Pro Customer Strategy to Lift Sales

Per the Zacks analyst, Lowe's pro customer strategy, omni-channel efforts and merchandising initiatives may help boost sales.

Pandemic-Induced Demand to Aid 3M (MMM) Amid Uncertainties

Per the Zacks analyst, 3M (MMM) is anticipated to benefit from high demand for respirators due to the pandemic, with sales growth of 300 basis points expected in fourth-quarter 2020.

Estee Lauder (EL) Benefits From Robust Skin Care Category

Per the Zacks analyst, Estee Lauder (EL) is gaining from solid Skin Care sales for a while now. Notably, sales in the category grew 10% year over year in the fiscal first quarter.

Digital Moves Aid Fidelity (FIS), Intense Competition Hurts

Per the Zacks analyst, Fidelity National is well positioned to benefit from investments in mobile banking and innovative products.

Digital Transformation, AI Proliferation Aid Infosys (INFY)

Per the Zacks analyst, Infosys is benefiting from large deal wins and higher investments by clients in digital transformation, artificial intelligence and automation.

YUM! Brands (YUM) Banks on Digital Efforts Amid High Costs

Per the Zacks analyst, YUM! Brands increased focus on digital initiatives and refranchising efforts bode well.

New Upgrades

Strategic Initiatives & Acquisitions Aid Owens Corning (OC)

Per the Zacks analyst, Owens Corning's strategic efforts comprising expansion through acquisitions, investments in process technology to improve manufacturing efficiencies, and reduce costs bode well.

ArcelorMittal USA Buy, HBI Plant Aid Cleveland-Cliffs (CLF)

Per the Zacks analyst, Cleveland-Cliffs will benefit from significant synergies of the ArcelorMittal USA acquisition. The hot briquetted iron (HBI) plant will also create new demand for the company.

Autonomous Pharmacy Growth Aids Omnicell (OMCL) Amid Pandemic

The Zacks analyst is upbeat about Omnicell's fully Autonomous Pharmacy, Omnicell One, which will leverage cloud-based data and predictive prescriptive analytics.

New Downgrades

ServiceNow (NOW) Hurt by Weak IT Spend & Stiff Competition

Per the Zacks analyst, ServiceNow is bearing the brunt of coronavirus crisis led macroeconomic weakness induced muted IT spending. Also, stiff competition in non-ITSM product segments is a concern.

Weak End Markets to Hurt John Bean Technologies (JBT)

The Zacks analyst is worried that decline in demand for food service due to reduced restaurant and school activity as well as lower air travel amid the pandemic will weigh on the company's segments.

Theravance's (TBPH) High Reliance On Partners for Funds a Woe

Per the Zacks analyst, Theravance is solely dependent on Mylan for profit-sharing revenue and collaboration revenues from J&J for funds.

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
Visa Inc. (V): Free Stock Analysis Report
Union Pacific Corporation (UNP): Free Stock Analysis Report
TMobile US, Inc. (TMUS): Free Stock Analysis Report
3M Company (MMM): Free Stock Analysis Report
Lowes Companies, Inc. (LOW): Free Stock Analysis Report
AstraZeneca PLC (AZN): Free Stock Analysis Report
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