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Top Research Reports for Berkshire Hathaway, Verizon & Nike

Monday, January 7, 2018

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 Berkshire Hathaway (BRK.B), Verizon (VZ) and Nike (NKE). 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 >>>

Buy-ranked Berkshire Hathaway’s shares have outperformed the Zacks Insurance - Property and Casualty industry over the past year (-3.7% vs. -5.9%). The Zacks analyst thinks the company is poised for growth over a longer-term banking on sturdy insurance business. Its property and casualty insurance business generate maximum return on equity.

The company’s inorganic growth story remains impressive with strategic acquisitions. A strong cash position allows it to make earnings-accretive bolt-on buyouts. Demand for utilities is expected to rise in the future and drive earnings growth. Continued insurance business growth also fuels increase in float. A sturdy capital level provides further impetus.

However, its exposure to catastrophe loss remains a concern. Huge capital expenses due to railroad operations pose concerns. Capital expenditure is estimated to be $9.8 billion in 2018.

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

Shares of Verizon have gained +7.5% over the past year, outperforming the Zacks Wireless National industry’s decline of -5.2% during the same period. The Zacks analyst thinks Verizon remains poised to benefit from the upcoming 5G boom, driven by healthy traction in the wireless business.

The company is seeking a first mover advantage in the 5G race as it plans to launch commercial 5G smartphones in the market in the first half of 2019 in collaboration with Samsung. Focus on online content delivery, mobile video and online advertising should also drive future growth. However, the company continues to struggle in a competitive and saturated U.S. wireless market, where spectrum crunch has become a major issue, hurting its profitability.

Verizon continues to face softer wireline revenues and margins due to technology shifts and ongoing secular pressures from legacy technologies. In an effort to expand its customer base, Verizon is spending heavily on promotion and is offering lucrative discounts, which is further weighing on margins.

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

Nike’s shares have gained +15.6% in the past year, outperforming the Zacks Shoes and Retail Apparel industry, which gained +8.7% over the same period, driven by a strong earnings trend stemming from the solid execution of Consumer Direct Offense. NIKE has delivered positive earnings surprise for over three years now, with second-quarter fiscal 2019 marking 26th straight quarter of earnings beat.

Moreover, sales topped estimates for the seventh straight quarter. The Zacks analyst thinks strong progress on Consumer Direct Offense through innovation and focus on direct-to-customer are the key drivers. Growth at international and NIKE Direct businesses alongside momentum in North America also aided the fiscal second quarter results.

Meanwhile, continued strength in NIKE Digital is driving the top line. However, higher SG&A expenses due to increased demand creation expense and operating overheads are likely to remain a drag. Further, the unfavorable currency environment due to the global trade and geopolitical dynamics is likely to weigh on the company’s sales.

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

Other noteworthy reports we are featuring today include Dominion Energy (D), Williams Companies (WMB) and Intercontinental Exchange (ICE).

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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

Strong Global Data Services Aids Intercontinental (ICE)

Per the Zacks analyst, Intercontinental Exchange is poise to grow on the strength in global data services, diverse liquid, global derivatives and equities markets and solid cash and capital position.

Transco Pipeline System Aids Williams (WMB) Amid Debt Woes

While Williams' expansion projects for its core Transco system of pipelines should buoy the firm's revenues and cash flows, the Zacks analyst is worried over the considerable long-term debt load.

Tapestry's (TPR) Multi-Brand Strategy to Aid Top-Line Growth

Per the Zacks analyst, transformational initiatives around products, stores and marketing bode well.

Pool Corporation (POOL) Gains From Existing Pool Business

The Zacks analyst notices that Pool Corporation generates more than half of its gross profits from products related to the maintenance and repair of existing pools.

Blackbaud (BLKB) Rides on Product Rollouts & Buyouts

Per the Zacks analyst, Blackbaud's expanding product portfolio, acquisition synergies and transition in the cloud-based subscription-based model are positives.

Loan Growth, Rising Rates Aid Synovus (SNV), High Costs Ail

Per the Zacks analyst, Synovus' top line should continue to benefit from higher rates along with rising loans and deposits.

Strategic Acquisitions to Aid Ferrellgas Partners (FGP)

Per the Zacks analyst, wide presence in the United States and strategic acquisitions are likely to boost growth of Ferrellgas Partners in the future.

New Upgrades

New Projects and Regulated Assets Aid Dominion Energy (D)

Per the Zacks analyst, Dominion Energy will gain from new projects, which are coming online at regular intervals. Improving earnings from regulated assets will continue to boost performance.

Rising Demand, Vale Fertilizantes Buyout Drive Mosaic (MOS)

The Zacks analyst believes that Mosaic is well placed to gain from increasing global demand for fertilizers. The Vale Fertilizantes acquisition should also deliver significant synergies.

Ultragenyx (RARE) Boasts Strong Rare Disease Drug Portfolio

Per the Zacks analyst, Ultragenyx has a strong rare disease drug portfolio with a strong pipeline. A potential approval of the pipeline candidates will be a boost for the company's revenues.

New Downgrades

Supply Delay to Hurt Zimmer Biomet (ZBH) Amid Forex Woes

Per the Zacks analyst, Zimmer Biomet is grappling with supply delay issues leading to the inability to recapture lost customers and gain new ones. Adverse currency movements continue to dent revenues.

WEX (WEX) Continues to Grapple With High Debt, Seasonality

The Zacks analyst believes that high debt may limit WEX's future expansion and worsen its risk profile. The company's businesses are also affected by seasonal changes.

Soft North American Business Weighs on Mondelez (MDLZ)

Per the Zacks analyst, Mondelez's North American business remains pressurized by operational hurdles leading to weak volumes.

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
Williams Companies, Inc. (The) (WMB): Free Stock Analysis Report
Verizon Communications Inc. (VZ): Free Stock Analysis Report
NIKE, Inc. (NKE): Free Stock Analysis Report
Intercontinental Exchange Inc. (ICE): Free Stock Analysis Report
Dominion Energy Inc. (D): Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report
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