Top Research Reports for JPMorgan, Starbucks & Morgan Stanley

Thursday, May 30, 2019

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 JPMorgan (JPM), Starbucks (SBUX) and Morgan Stanley (MS). 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 >>>

Neutral-rated JPMorgan’s shares have lost -2.2% in the past six months, outperforming the Zacks Major Regional Banks industry’s decline of -6.6%. The bank has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters.

The Zacks analyst thinks higher rates, improving loan balance, expansion into new markets via new branch openings and focus on strengthening credit card business will support the company’s revenues. Expanding its reach into lucrative U.S. healthcare payments market with a deal to acquire InstaMed will go a long way in supporting profitability.

However, dismal mortgage banking performance, mainly due to lower origination volume and increase in competition, is expected to continue hampering fee income growth. The company's excessive dependence on capital markets revenues is a cause for concern and is expected to hamper revenue growth.

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

Shares of Neutral-rated Starbucks are up +12.8% over the past six months, outperforming the Zacks Food & Restaurants industry, which is up +7.3% over the same period. The Zacks analyst thinks the momentum is likely to continue as the company reported solid second-quarter fiscal 2019 earnings and raised its full-year view.

Notably, earnings surpassed expectations in all of the trailing four quarters. Robust Americas and CAP comps also bode well. Meanwhile, Starbucks' business is rapidly growing in China, courtesy of innovative store designs, local product innovations and the success of MSR program. Operating fundamentals such as solid global footprint, successful innovations, best-in-class loyalty program and digital offerings are major positives.

Again, digital initiatives like mobile order/pay and delivery services can stimulate robust sales further. However, the operating margin contraction over the past few quarters has been a major concern.

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

Neutral-rated Morgan Stanley’s shares have lost -5.4% over the past six months, outperforming the Zacks Investment Banking industry, which has declined -7.2% over the same period. The company possesses an impressive earnings surprise history. Its earnings have surpassed expectations in three of the trailing four quarters.

The Zacks analyst thinks the acquisition of Solium Capital is in sync with the company’s efforts to strengthen its wealth management business. Moreover, focus on the corporate lending unit, steady loan growth, higher interest rates and normalized levels of trading activities will likely aid revenue growth going forward.

Its steady capital deployment activities indicate a strong liquidity position. However, a slowdown in debt originations will likely hinder underwriting fee income growth and hurt the company’s investment banking performance. Elevated operating expenses are likely to hurt profits.

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

Other noteworthy reports we are featuring today include HP (HPQ), Twitter (TWTR) and IBM (IBM).

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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>>>

Today's Must Read

InstaMed Deal, Loans Aid JPMorgan (JPM), Mortgage Fees a Woe

Starbucks' (SBUX) Strong Global Footprint to Drive Growth

Solium Deal Aids Morgan Stanley (MS), Debt Originations a Woe

Featured Reports

Strong Acute Therapies Segment Continues to Aid Baxter (BAX)

Per the Zacks analyst, Acute Therapies business continues to bolster Baxter's performance fueled by increased global demand for the company's continuous renal replacement therapies.

New Features & Security Focus Drive Twitter's (TWTR) Growth

Twitter continues to add new features and ramp up its security efforts to lower abuse, which per the Zacks analyst is boosting engagement levels, thereby aiding ad revenue growth.

Strong Commercial PC Sales Aid HP (HPQ), Consumer PC Ails

Per the Zacks analyst, HP is gaining from rising demand for commercial PCs, backed by Windows 10 refresh cycle.

2020 Plan Boosts TreeHouse Foods (THS), Snacks Unit Ails

TreeHouse Foods' Snacks unit has been sluggish for a while, and is likely to hurt second-quarter earnings and sales.

Strategic Initiatives Aid ProAssurance (PRA), High Costs Hurt

Per the Zacks analyst, buyouts such as Medmarc and Eastern Insurance Holdings have helped the company boost its financial size and strength.

Terex (TEX) Rides on Favorable Global Markets, Costs Ail

Per the Zacks analyst, Terex is poised to benefit from focus on the Execute to Win strategy, favorable global markets, backlog strength and its capital-allocation plan.

Shipments & Depletions to Aid Boston Beer's (SAM) Top Line

Per the Zacks analyst, Boston Beer is likely to witness shipments and depletions growth in 2019, supported by strength in Truly Hard Seltzer and Twisted Tea brands.

New Upgrades

Dynamic Pricing, Operating Efficiency to Aid Lennar (LEN)

Per the Zacks analyst, Lennar is poised to benefit from prudent land investment strategies, strength in the housing market, dynamic pricing model and operating efficiency.

SemGroup (SEMG) to Ride on White Cliffs Pipeline Conversion

Semgroup's plans to convert a portion of the White Cliffs Pipeline system to NGL service are expected to open up new avenues and boost earnings prospects of the firm, per the Zacks analyst.

RLI Corp. (RLI) Set to Grow on Sturdy Underwriting Policies

Per the Zacks analyst, RLI is well poised to grow on solid underwriting discipline, strategic investments in fortifying Casualty segment and divesting underperforming products from Property business.

New Downgrades

Robust Adoption of Cloud Solutions Aid IBM Amid High Debt

Per the Zacks analyst, IBM's blockchain, cloud and ML capabilities, among others, positions its offerings well to gain robust adoption. However, stiff competition and high debt remain concerns.

Arrow (ARW) Hurt By Currency Volatility, Margin Compression

Per the Zacks analyst, Arrow's high exposure to foreign currency exchange rate risk is an overhang on the top line. Moreover, shift in demand to lower margin products is a dampener.

Higher Operating Expenses Plague Align Technology (ALGN)

The Zacks analyst is concerned about the company's surging operating expenses pertaining to increased head count, thereby weighing on margins.

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Twitter, Inc. (TWTR) : Free Stock Analysis Report
 
Starbucks Corporation (SBUX) : Free Stock Analysis Report
 
Morgan Stanley (MS) : Free Stock Analysis Report
 
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
 
International Business Machines Corporation (IBM) : Free Stock Analysis Report
 
HP Inc. (HPQ) : Free Stock Analysis Report
 
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