Wednesday, August 28, 2019

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features updated research reports on 16 major stocks, including Costco (COST), PayPal (PYPL) and NextEra (NEE). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Costco’s shares have outperformed the Zacks Discount Retail industry over the past year, gaining +27% versus the industry's +14.8% increase. The Zacks analyst thinks Costco continues to be one of the dominant retail wholesalers based on the breadth and quality of merchandise offered. The stock has been gaining from sturdy comps and decent results.

The company posted a positive earnings surprise in the third quarter of fiscal 2019 but revenues fell short of expectations. Notably, the top and the bottom line continued to rise year over year. Certainly, Costco seems somewhat unfazed by tough retail scenario.

Growth strategies, increase in membership fees and sturdy e-commerce sales bode well. The company’s efforts have been driving traffic across online and brick-and-mortar platforms. However, any incremental investments or aggressive pricing strategy may hurt margins. Moreover, rising SG&A expenses and stiff competition also pose concerns.

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

Shares of PayPal have underperformed the Zacks Internet Software industry year to date (+27.8% vs. +30.9%). The Zacks analyst thinks PayPal’s portfolio strength remains its key catalyst. Venmo’s improving monetization efforts and rising adoption rate across various platforms are aiding the company’s total active accounts.

Further, robust mobile checkout services of One Touch are contributing to the company’s total payment volume growth. Also, growing momentum of PayPal’s core peer to peer is aiding in acceleration of payment volume.

Additionally, the company is riding on the benefits from its investment in MercadoLibre and increasing customer engagements on its platform. However, weak eBay performance remains a headwind. Further, negative impacts of sale of the U.S. consumer credit receivables portfolio to Synchrony pose a threat to the company’s top line.

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

NextEra’s shares have outperformed the Zacks Electric Power industry in the past year, gaining +31.4% vs +11.9%. The Zacks analyst thinks NextEra’s investments in driving renewable operations through the “30 by 30” plan will help meet its goal to make its generation portfolio cleaner. Investments worth $39.1 billion in different projects over the 2019-2023 period will modernize and strengthen its infrastructure.

Focus on expanding operations in natural gas pipelines and further widening of business via acquisitions and organic growth will enable the company to achieve its long-term earnings growth target. However, its nature of business is subject to complex and comprehensive federal, state and other regulations.

That said, if planned nuclear plant outages last longer than expected or there is an unplanned outage, the company’s normal operations and profitability might be hindered.   

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

Other noteworthy reports we are featuring today include Alexion Pharmaceuticals (ALXN), Southern Copper Corporation (SCCO) and Loews (L).

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Note: Our Director of Research 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>>>