Top Analyst Reports For American Express, Verizon & EBay

Monday, October 23, 2017

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 American Express (AXP), Verizon (VZ) and eBay (EBAY). 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 >>>

Buy-rated American Express’ shares are up +39.5% over the last year, outperforming the Zacks Financial Miscellaneous Services industry, which has gained +29.9% over the same period. Its third-quarter earnings beat expectations and improved year over year.

Better-than-expected results were mainly backed by an increase in net interest income, higher Card spending at a lower tax rate and the effect of share buyback. The company continues to witness strong loan growth and credit metrics, plus lower operating costs.

The Zacks analyst likes its solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments are growth drivers. Strategic initiatives focusing on the platinum card portfolio and the OptBlue program will drive business volume.

Cost reduction and return of significant capital to shareholders through dividend and share buyback are also positives. However, an increase in provision for losses, high rewards expense and cost of card member services are the other headwinds.

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

Shares of Verizon have lagged recently -- the stock is down -2.6% year to date vs. AT&T (NYSE:T)'s -12.2% decline and the +17% gain for the S&P 500 index. Verizon posted mixed third-quarter 2017 financial results, with net gain of 603,000 postpaid and 139,000 prepaid wireless customers.

The Zacks analyst thinks these user additions came on the back of Verizon’s unlimited data plans. Verizon is teaming up with Amazon (NASDAQ:AMZN) to deliver virtual network services at a global scale. The company’s 5G wireless network trials and deployment plans complements its 5G wireless expansion strategies.

Verizon plans to merge its Go90 content into its other digital platforms and is on track to boost its fiber suite through different deals. However, Verizon operates in a highly competitive and saturated wireless market.

Loss in wireline access lines, marketing costs of promotional plans, competitive video market are other major risks. Delay in OTT services' launch is a major drawback.

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

eBay’s shares have underperformed the Zacks Internet Commerce industry in the year to date period (+26.7% vs. +50.7%). The company’s third-quarter 2017 earnings matched expectations while revenues beat the same. The Zacks analyst likes several initiatives taken by eBay, including building a solid foundation of structured data and artificial intelligence (AI), customer-to-customer (C2C) business and enhancing mobile experience.

While the separation from PayPal led to the loss of a good growth engine, eBay is well positioned for growth based on the aforesaid factors. However, weak global economy, slow e-commerce growth and stiff competition remain overhangs.

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

Other noteworthy reports we are featuring today include KeyCorp (NYSE:KEY) (KEY), Synchrony Financial (SYF) and SAP (SAP).

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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>>>