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Top Stock Reports for United Technologies, Lockheed Martin & NextEra Energy

Mark Vickery
Have more faith in DuPont analysis than simple ROE calculation? Bet on these five stocks.

Wednesday, January 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 United Technologies (UTX), Lockheed Martin (LMT) and NextEra Energy (NEE). 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-ranked United Technologies’ shares have lost 5.1% over the past three months, underperforming the Zacks Diversified Operations industry, which has declined 1.8% over the same period. However, United Technologies' fourth-quarter 2018 earnings and revenues surpassed expectations by a wide margin.

The Zacks analyst thinks strength in commercial and military aftermarket businesses and impressive contribution from its acquired Rockwell Collins business sales will likely continue to boost United Technologies' near-term revenues. Also, improved revenues and cost-cutting measures are expected to enhance profitability, going forward.

Backed by these positives, the company has given bullish full-year 2019 revenue guidance. Further, the Rockwell Collins buyout is likely to boost sales in 2019. Moreover, separation of the company's existing business will create higher values and customer satisfaction.

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

Shares of Lockheed Martin have lost 17.7% in the past year, underperforming the Zacks Aerospace Defense sector, which has declined 8.8% over the same period. Lockheed Martin ended 2018 on a mixed note. While the company’s fourth quarter earnings came in line with the Zacks Consensus Estimate, revenues surpassed the consensus mark. Year over year results were impressive.

The Zacks analyst thinks that being the largest defense contractor in the world, Lockheed enjoys strong demand for its high-end military equipment in domestic and international markets. Consequently, strong order growth has been a primary growth driver for this company. The F-35 program continues to be a primary growth driver for the company.

However, it faces intense competition for its broad portfolio of products and services in both domestic and international markets. It remains subject to interest rate risk related to the issuance of debt. With current U.S. economic conditions favoring higher rates, the credit market may not be favorable for Lockheed Martin.

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

Buy-ranked NextEra Energy’s shares have outperformed the Zacks Electric Power industry in the past year, gaining 9.1% vs 3.4%. However, NextEra Energy’s fourth-quarter earnings and total revenues missed expectations. But strong execution of operational and financial plans allowed NextEra Energy to report solid year-over-year results.

The Zacks analyst thinks investments to strengthen its infrastructure and ongoing capital projects, on completion, will help in serving the expanding customer base more efficiently. The expansion of business through strategic acquisitions positively impacted earnings.

The company’s nature of business is subject to complex and comprehensive federal, state and other regulations. Substantial investments are undertaken to ensure the safety of nuclear operations. That said, the risk of unplanned outages remains, which could derail its normal operations and impact profitability.

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

Other noteworthy reports we are featuring today include NVIDIA (NVDA), Goldman Sachs (GS) and Intuitive Surgical (ISRG).

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?

From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.

This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.

See Stocks Today >>

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

Strong Aerospace Business Boosts United Technologies (UTX)

Order Flows to Aid Lockheed (LMT) Amid Rising Interest Expenses

Investments & Strong Economic Conditions Aid NextEra (NEE)

Featured Reports

Legal Costs & Low Trading Income Weigh on Goldman (GS)

Per the Zacks analyst, legal issues leading to higher expenses remain a concern for Goldman. Further, challenging environment depicting lower client activity levels add to the woes.

da Vinci System Aids Intuitive (ISRG) Amid Stiff Competition

Strong prospects in Intutive Surgical's robotic platform - da Vinci System - is a positive. However, the Zacks analyst is apprehensive about cutthroat competition in the MedTech space.

Solid NextSeq Placement Aids Illumina (ILMN) Amid Margin Woes

Illumina's sequencing business continues to grow on strong market adoption of NextSeq throughput. But the Zacks analyst is concerned about the escalating costs putting pressure on bottom line.

Fleet Upgrade, Unit Revenues Aid United Continental (UAL) .

The Zacks analyst likes the company's performance with respect to unit revenues. Efficient cost management and fleet upgrade efforts are added positives.

Growing Invisalign Volumes Aid Align (ALGN) Amid Cost Woes

The Zacks analyst is impressed with Align Technology's strong global Invisalign sales, particularly in EMEA and Asia-Pacific regions. But, rising operating costs continue to pose concerns.

Strong Growth Aids L3 Technologies (LLL), Competition Hurts

Per the Zacks analyst, L3 Technologies witnesses strong growth in commercial aviation market.

Expanding Customer Base & Cloud Adoption Aid Citrix (CTXS)

Per the Zacks analyst, Citrix benefits from robust demand for desktop virtualization solutions & rising customer base.

New Upgrades

GMV Growth & Active User Base Expansion Aids eBay (EBAY)

Per the Zacks analyst, eBAY is benefiting from strong GMV growth in core Marketplace platform along with expanding active user base.

Solid Consumer Digital Security Segment Aids Symantec (SYMC)

Per the Zacks analyst, successful cross-selling and improved retention rate for direct customers are driving the Consumer Digital Security segment and boosting Symantec's top line.

Jabobs (JEC) Rides on Solid Backlog & Project Execution

Per the Zacks analyst, improved segmental performances, solid backlog, efficient project execution and efforts made to focus on high-value business will likely improve Jacobs' near-term results.

New Downgrades

Higher Raw Material Costs to Mar Colgate's (CL) Bottom Line

Per the Zacks analyst, higher raw material costs have been hurting Colgate's margins and bottom line growth for the past few quarters. This should continue to mar earnings in 2019.

NVIDIA (NVDA) Hurt by Soft Gaming and Data Center Businesses

Per the Zacks analyst, sluggish consumer demand for gaming GPUs due to weakness in China market is a major headwind for NVIDIA. Also, lower data center deals due to customer wariness is a concern.

Cat Loss, Soft Reinsurance Operations Hurt W.R. Berkley (WRB)

Per the Zacks analyst, W.R. Berkley's cat loss exposure induces underwriting volatility and weighs on bottom line. Also, increasing competition in global reinsurance segment remains a drag on premium.

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United Technologies Corporation (UTX) : Free Stock Analysis Report

NextEra Energy, Inc. (NEE) : Free Stock Analysis Report

Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report

The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report

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