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Top Stock Reports for Lockheed Martin, Mastercard & Colgate

Friday, February 2, 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 Lockheed Martin (LMT), Mastercard (MA) and Colgate (CL). 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 >>>

Strong Buy-rated Lockheed Martin’s shares have gained +40.4% over the last one year, underperforming the Zacks Aerospace Defense sector, which has gained +60.8% over the same period. However, Lockheed Martin ended 2017 on a solid note. Its fourth-quarter earnings as well as revenue figures comfortably exceeded expectations.

The recent tax reform adopted by the U.S. government had an adverse impact on the company’s year-over-year earnings growth, while revenues reflected an uptick. The Zacks analyst emphasizes that being the largest defense contractor in the world, Lockheed Martin experiences strong demand for high-end military equipment in both domestic as well as overseas markets.

Strong order growth has been a primary growth driver for this company. The latest $7-billion deal for the sustainment of F-22 air vehicle is one such order. Lockheed Martin continues to be a strong cash generator, helping it to take important cash deployment decisions. However, the F-35 program, despite being a prime defense project for the U.S. government, has been facing criticism for being overtly expensive, for past few years.

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

Shares of Mastercard have gained +62.3% over the past one year, outperforming the Zacks Financial Transaction Services industry which has gained +43.3% over the same period. Mastercard’s fourth-quarter earnings beat expectations, driven by higher switched transactions, increase in cross-border volume and gross dollar volume as well as gains from acquisitions. An increase in rebates and incentives from the prior-year quarter was a partial dampener.

The Zacks analyst likes Mastercard’s solid market position, ongoing expansion and digital initiatives. Further, there are significant opportunities from the secular shift toward electronic payments. The acquisitions of VocaLink and NuData Security complement the company’s efforts to participate in new payment flows and enhance its safety and security offerings. However, it continues to face increasing costs. Also, higher incentives and rewards will put pressure on the bottom line.

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

Colgate’s shares are up +11.2% over the last one year, outperforming the Zacks Consumer Staples sector, which has gained +10.5% over the same period. The Zacks analyst likes the progress on the Global Growth and Efficiency Program along with additional savings anticipated from the recent expansion of the program.

Moreover, the company has been infamous with investors for its meet or beat earnings track record. Notably, it delivered in-line earnings for the third consecutive quarter in fourth-quarter 2017. However, margins continue to be strained due to higher raw material and packaging costs, as well as advertising expenses. It anticipates advertising costs to remain high in 2018, which should hurt operating margin.

Colgate expects the backdrop to remain challenging in 2018 due to uncertain global markets and slowing category growth worldwide. Nonetheless, it remains confident of the brand building and productivity maximization initiatives, which are likely to boost results.

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

Other noteworthy reports we are featuring today include Electronic Arts (EA), HCA Healthcare (HCA) and McKesson (MCK).

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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>>>

Featured Reports

Growing Digital Business Aids EA (EA), Higher Expenses Hurt

Per the Zacks analyst, the shift from physical to digital versions of video games backed by strong mobile business is driving EA. However, higher spending on games & live services is hurting margins.

Acquisitions, Efforts to Prune Portfolio to Aid Dover (DOV)

Per the Zacks analyst, Dover will gain from its efforts to prune its portfolio, pursue acquisitions and invest in market-leading platforms that have strong market positions and margin profiles.

Production Expansion to Aid Nucor (NUE), Imports a Woe

The Zacks analyst thinks while Nucor should gain from efforts to expand production capacity and grow via acquisitions.

RxCrossroads Buy to Aid McKesson's (MCK) Biopharma Position

The Zacks analyst is looking forward to McKesson's recent buyout of RxCrossroads which should strengthen the company's foothold in the pharmaceutical and biotechnology space.

Rising Rivalry to Hurt IDEXX's (IDXX) Growing CAG Business

The Zacks analyst thinks the ongoing entry of new players will dent IDEXX's expanding Companion Animal Group (CAG) business in the United States and internationally.

TOP Efficiency Initiatives Support Citizens Financial (CFG)

Per the Zacks Analyst, Citizens Financial's 'Tapping Our Potential' (TOP) initiatives are expected to boost revenues and efficiency.

Acquisitions, Global Market Expansion Drives AMETEK (AME)

Per the Zacks analyst, AMETEK continues to benefits from global market expansion, investments in product development and strategic acquisitions.

New Upgrades

CA Inc. (CA) Benefits From Go-to-Market Sales Strategy and Buyouts

Buyouts like Automic Holding are enhancing CA's cloud computing capabilities, which along with its go-to-market sales strategy are driving overall growth, per the Zacks analyst.

PACCAR (PCAR) Rides on Rising Demand for Class 8 Truck

PACCAR's U.S. Class 8 truck retail sales are rising. Per the Zacks analyst, demand for trucks is rising due to strong economic growth, high consumer spending and heightened construction activities.

Acquisitions Fuel HCA Healthcare's (HCA) Top Line Growth

Per the Zacks analyst, HCA Healthcare has been witnessing a steady growth in its revenue on the back of its buyouts. The pending acquisition of Memorial Health is worth a mention here.

New Downgrades

Xerox (XRX) Profit Margins Marred by Substitutes, Falling Demand

Per the Zacks analyst, stiff competition from substitutes and decreased demand for paper-related systems and products due to changing market trends has affected Xerox's profit margins.

GoDaddy (GDDY) Faces Tough Competition and Integration Risks

The Zacks analyst believes that increasing competition in domain and hosting markets along with integration risks are major concerns. Also, heavy debt burden will continue to pose a challenge.

Weakness at UK Division, Soft Traffic to Hurt Signet (SIG)

Per the Zacks analyst, adverse impact of the credit outsourcing transition, weakness at UK division along with waning mall traffic are the headwinds with which Signet Jewelers is grappling.

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McKesson Corporation (MCK): Free Stock Analysis Report
Mastercard Incorporated (MA): Free Stock Analysis Report
Lockheed Martin Corporation (LMT): Free Stock Analysis Report
HCA Holdings, Inc. (HCA): Free Stock Analysis Report
Electronic Arts Inc. (EA): Free Stock Analysis Report
Colgate-Palmolive Company (CL): Free Stock Analysis Report
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