Wednesday, December 30, 2020
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 PayPal (PYPL), Bank of America (BAC) and Citigroup (C). 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 >>>
PayPal shares have outperformed the Zacks Internet Software industry in the year to date period (+114.1% vs. +108.5%). The Zacks analyst believes that PayPal is benefiting from robust growth in total payments volume owing to increasing net new active accounts. Further, strengthening customer engagement on the company’s platform is a major positive.
Furthermore, Venmo’s improving monetization efforts and rising adoption rate across various platforms are aiding the total active accounts. Additionally, growing momentum of core peer to peer and PayPal Checkout experiences is a tailwind.
Also, benefits from Honey buyout are positives. However, increasing credit loss reserves owing to macroeconomic projections on account of coronavirus is a serious matter of concern. Further, intensifying digital payment competition is a risk.
(You can read the full research report on PayPal here >>>)
Shares of Bank of America have lost -14.8% over the past year against the Zacks Major Regional Banks industry’s loss of -19.5%. The Zacks analyst believes that opening of new branches, steady improvement in digital offerings and efforts to manage expenses are likely to support profitability.
A strong balance sheet and liquidity position are expected to continue aiding the company’s financials amid economic slowdown. Further, its capital deployments are decent. However, near-zero interest rates and no near-term chance of any change in the same are expected to continue hurting the bank’s margins and interest income.
Additionally, coronavirus-induced concerns are likely to further hamper business activities. Thus, loan growth is expected to be muted in the near term.
(You can read the full research report on Bank of America here >>>)
Citigroup shares have gained +21.1% over the past six months against the Zacks Major Regional Banks industry’s rise of +28.3%. The Zacks analyst believes that Citigroup’s streamlining efforts, along with strategic investments in core business, bode well.
Also, net interest revenues will likely be supported by loan growth and mix, despite low interest rates environment. Further, manageable debt level makes Citigroup less risky in case of any economic downturn. Though, pending litigations and subdued consumer banking business remain concerns, Citigroup’s shrinking costs base due to the wind-down of legacy assets is aiding bottom-line expansion.
Notably, the company recently announced to have passed the Fed’s second round of stress test and will resume buybacks in 2021.
(You can read the full research report on Citigroup here >>>)
Other noteworthy reports we are featuring today include Intel (INTC), Zoom Video Communications (ZM) and Goldman Sachs (GS).
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it’s predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce “the world’s first trillionaires,” but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks’ 3 Best Stocks to Play This Trend >>
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>>>
Today’s Must Read
PayPal (PYPL) Benefits From Increasing Total Payment Volume
Expense Saving Supports Bank of America (BAC) Amid Low Rates
Streamlining Efforts, Expense Savings Support Citigroup (C)
Featured Reports
Intel (INTC) Banks on Portfolio Strength Amid 7 nm Delay
Per the Zacks analyst, Intel is benefitting from solid uptake of 5G networking solutions, higher modem sales, and Optane bit growth.
Expanding Clientele, Remote-Working Solutions Aids Zoom (ZM)
Per the Zacks analyst, Zoom is benefiting from solid adoption of remote working solutions and expanding subscribers base attributed to coronavirus-led distancing norms.
Business Diversification & Cost Control Benefits Goldman (GS)
Per Zacks analyst, the key source of Goldman’s earnings stability is business diversification. Also, continual cost management efforts are likely to give it an edge over its peers.
FedEx (FDX) Rides on E-commerce, Dividends and Buybacks
The Zacks analyst is impressed by the company’s efforts to reward its shareholders even in these difficult times. The phenomenal growth in e-commerce demand is a huge boon.
General Motors (GM) Set to Benefit From Ambitious EV Plans
The Zacks analyst appreciates General Motors’ $27 billion investment plans on electric vehicles, partnerships with Honda and EVgo and its Ultium Drive system which is set to boost its e-mobility game.
Packaged Beverages & Coffee Units to Aid Keurig’s (KDP) Sales
Per the Zacks analyst, Keurig Dr Pepper is gaining from solid consumption of coffee and packaged beverages as people are working from home amid the pandemic.
Telefonica (TEF) to Optimize Operations for Profitable Growth
Per the Zacks analyst, Telefonica aims to optimize its core operations for profitable growth by focusing more on deleveraging efforts, while reducing exposure to emerging markets.
New Upgrades
Acquisitions and Demand Recovery Benefit Reliance Steel (RS)
Per the Zacks analyst, Reliance Steel should benefit from its strategic acquisitions and a rebound in demand in non-residential construction and automotive markets from the pandemic-led slowdown.
Insperity (NSP) Rides on Client Retention, Higher Worksite Employees
The Zacks Analyst is optimistic about higher client retention and a rise in net hiring of worksite employees. Consistent efforts to reward its shareholders positively impact the bottom line.
B&G Foods (BGS) Sales to Benefit From Pandemic-Led Demand
Per the Zacks analyst, B&G Foods has been benefiting from consumers’ rising demand due to pandemic-led higher at-home consumption. Management expects a robust demand trend in the fourth quarter.
New Downgrades
Higher Costs, Lower Production Ail Newmont (NEM)
According to the Zacks analyst, higher production costs will weigh on the company’s bottom line. Declining gold production amid the coronavirus pandemic is another concern.
Soft Gross Margin a Worry for Columbia Sportswear (COLM)
Per the Zacks analyst, Columbia Sportswear’s (COLM) gross margin has been declining year over year for a while now. During the third quarter gross margin contracted 40 basis points to 48.9%.
High Expenses, Low Interest Rate Ail American Equity (AEL)
Per the Zacks analyst, American Equity has been experiencing a contraction of investment yield given the low-interest rate environment. Also, higher expenses have been inducing margin contraction.
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
Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
Intel Corporation (INTC) : Free Stock Analysis Report
The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
Citigroup Inc. (C) : Free Stock Analysis Report
Bank of America Corporation (BAC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Add Comment