Monday, March 5, 2018

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 Kraft Heinz (KHC), EOG Resources (EOG) and CME Group (CME). 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 >>>

Kraft Heinz’s shares have declined -26.3% over the last one year, underperforming the Zacks Diversified Food industry which is down -11% over the same period. Kraft Heinz posted lower-than-expected results in the fourth quarter of 2017 with both earnings and sales missing expectations.

Net sales increased by a meager 0.3% year over year, but earnings declined 1.1% from the year-ago level. Sales growth continued to face challenges in the quarter due to softness in the U.S. retail environment. Organic sales in the United States declined 1.1% year over year due to lower volume.

Soft consumer demand in North America and Canada along with a 4% year-over-year decline in gross profit affected the company’s fourth-quarter earnings. Kraft Heinz has been struggling due to the shift in consumer preferences toward natural and organic ingredients over packaged and processed food. Additionally, earnings estimates are trending downward for 2018 over the last 30 days.

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

Shares of Buy-rated EOG Resources have gained around +1.3% over the last one year, outperforming the Zacks Oil & Gas E&P Industry, which has declined -15.9% over the same period. EOG holds premium acreages in the Permian, Bakken and Eagle Ford oil shale plays in the United States where it has identified 17,000 premium wells that could lend access to almost 11.3 billion barrels of oil equivalent estimated potential reserves.

In the Eagle Ford alone, EOG identified 7,200 locations that will drive the firm’s oil production. Meanwhile, the company continues to lower its well drilling and exploration expenses.

In the next 10 years, EOG plans to drill many premium oil wells and its strong emphasis on reducing costs has led to an encouraging outlook. In the fourth quarter, the firm surpassed both the top and bottom lines, thanks to higher commodity price realizations.

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

Buy-rated CME Group’s shares have outperformed the Zacks Securities and Exchanges industry over the last one year, gaining +34% vs. +27.2%. CME Group’s fourth-quarter 2017 results outpaced expectations but deteriorated year over year due to lower trading volumes.

The company remains well-positioned for growth on a strong market position with diverse derivative product lines. Efforts to expand and cross sell its core exchange-traded business via new product initiatives and global reach also support growth.

It intends to exit its credit default swap clearing business by mid-2018 and focus on over-the-counter clearing services on interest rate swaps as well as foreign exchange. This will free up $650 million as clearing member capital. 

However, expenses remain a concern. Adjusted total operating expenses excluding license fees are projected to range between $1.10 billion and $1.11 billion in 2018.  Exposure to interest rate volatility and limited credit availability might hamper liquidity.

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

Other noteworthy reports we are featuring today include Bayer (BAYRY), TJX Companies (TJX) and Ecolab (ECL).

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 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 >>

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

Kraft Heinz (KHC) Fights Sales Slump with Cost-Saving Plans

EOG Resources (EOG) to Gain From Oil-Rich Eagle Ford Acreage

Derivative Product Lines Continue to Aid CME Group (CME)

Featured Reports

Monster Beverage (MNST) Affected by High Operating Costs

As per the Zacks analyst, increasing operating expenses related to sales building are putting substantial pressure on Monster Beverage's margins.

Solid Comps Fuels TJX Companies (TJX), Wage Costs a Worry

Per the Zacks analyst, strong merchandise strategies have been boosting TJX Companies' store traffic and comps for a while now.

ONEOK (OKE) to Gain from Fee-based Earnings, New Investment

The Zacks analyst believes ONEOK's focus to increase fee-based earnings and invest another $4.2 billion in new growth projects will drive its performance.

Strong Investment Pipeline to Aid Realty Income's (O) Growth

Per the Zacks analyst, Realty Income is likely to ride high with robust investment pipeline. But, choppy retail real estate environment and rate hike remain concerns.

Vehicle Assembly Unit Aids Magna (MGA), America Sales Dip

Per the Zacks analyst, winning of several new business contracts by its complete vehicle assembly segment is aiding Magna.

Strong Growth in Global Industrial Segment Aids Ecolab (ECL)

Ecolab is gaining prominence in the MedTech space, courtesy of strong growth Global Industrial segment. The Zacks analyst is bullish on the segment's solid prospects in Europe & North America.

Universal Health (UHS) Drives Margin on Top Line Growth

Per the Zacks analyst, Universal Health's margin has improved on solid revenue growth backed by strong segmental performances

New Upgrades

Haynesville Shale Program to Drive Comstock (CRK) Growth

Comstock's large acreage position in the prolific Haynesville Shale play and its low-cost structure has made the Zacks analyst turn bullish on the E&P company.

American Public (APEI) Benefits from New Program Offerings

Per the Zacks analyst, American Public's new certificate and degree program offerings along with strong digital marketing campaigns are boosting enrollment and favoring growth.

End-Market & Portfolio Strength Drives Analog Devices (ADI)

Per the Zacks analyst, robust performance from industrial, automotive and communications end-markets are driving Analog Devices' top-line growth.

New Downgrades

Bayer (BAYRY) Faces Generic Headwinds & Pipeline Setbacks

Per the Zacks analyst, pipeline setbacks and generic competition remain headwinds for Bayer. Bayer's dependence on its pharmaceutical segment for growth remains a concern.

Clean Harbors (CLH) Faces Margin Woes due to Higher Costs

Per the Zacks analyst, reduction in volume of wastes and higher operating costs due to oil price volatility and seasonal factors impair the smooth functioning of Clean Harbors' business.

Soft National Advertising Market to Affect Outfront (OUT)

Per the Zacks analyst, the dull national advertising market is likely to continue affecting Outfront Media's profitability. Competition from other outdoor advertisers and rate hike add to its woes.

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
 
TJX Companies, Inc. (The) (TJX) : Free Stock Analysis Report
 
The Kraft Heinz Company (KHC) : Free Stock Analysis Report
 
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
 
Ecolab Inc. (ECL) : Free Stock Analysis Report
 
CME Group Inc. (CME) : Free Stock Analysis Report
 
Bayer Aktiengesellschaft (BAYRY) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research