Monday, March 27 2017

Today's Research Daily features new research reports on 16 major stocks, including Chevron (CVX), Home Depot (HD), and Citigroup (C).

Chevron shares have gained +14% over the last one year, handily outperforming the Zacks Oil & Gas-International Integrated industry, which rose just +7% over the same time period, as well as larger rival Exxon Mobil. Adding to the bullish sentiment, the No. 2 energy company in the U.S. swung to a Q4 profit from a year-ago loss. Rebounding oil and gas prices, together with lower operating expenses helped Chevron report a quarterly profit.

Importantly, despite being free-cash-flow negative, the deficit has narrowed considerably and Chevron is hoping to be cash flow neutral this year. Anticipated production growth from its extensive footprint in the Permian Basin is another positive. Still, the Zacks analyst sees limited upside potential for shares as weak downstream operations will hamper CVX’s near-term results. (You can read the full research report on Chevron here.)

Shares of Home Depot have gained +10.2% over the last year, more than the Zacks Retail- Wholesale sector, which has gained +5.1% over the same period. Improving customer experience, solid execution and consistent housing market recovery helped the company post better-than-expected bottom-line results for fourth-quarter fiscal 2016, retaining its four-year long trend of beating earnings estimates.

Home Depot initiated a robust guidance for fiscal 2017 and updated its capital allocation strategy, which called for a higher long-term dividend payout target of 55% of net earnings. However, intense competition and a soft economic recovery may prove deterrents, pushing back home improvement projects. (You can read the full research report on Home Depot here.)

Buy rated Citigroup shares have gained around +38.6% year to date, outperforming the Zacks categorized Major Regional Banks industry, which has gained +28.3% over the same period. Recently, Citigroup inked two deals to exit servicing operations by the end of 2018, in a bid to increase focus on mortgage originations through the U.S. retail footprint.

The deals are expected to negatively impact first-quarter 2017 pre-tax results by about $400 million. But the Zacks analyst likes the company’s restructuring and streamlining efforts, strategic investments in core business and expense management, which should support profitability, going forward. Notably, following recent Fed interest rate hike, Citigroup increased prime lending rate to 4.00%. (You can read the full research report on Citigroup here.)

Other noteworthy reports we are featuring today include FedEx (FDX) and Starbucks (SBUX).

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Mark Vickery

Senior Editor