Top Analyst Reports for Caterpillar, Intel & Monsanto

Wednesday, June 21, 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 Caterpillar (CAT), Intel (INTC) and Monsanto (MON). 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 >>>

Strong Buy rated Caterpillar's shares have gained +15.4% year-to-date, underperforming the Zacks Manufacturing - Construction and Mining industry which has increased +14.1% over the same period. Caterpillar's May sales rose 8%, an improvement from 1% growth witnessed in the last two months thanks to continual improvement in Asia Pacific.

Caterpillar guides revenues in the range of $38–$41 billion and earnings of $3.75 per share for 2017, a 2% and 10% year–over-year growth, respectively. Recently, it announced a 1.3% hike in quarterly dividend, a move that reflects its balance sheet strength which has once again enabled it to deliver incremental returns to shareholders.

In construction, Asia Pacific is showing promise while leading indicators of U.S. non-residential construction signal robust conditions ahead. The Zacks analyst stresses that Caterpillar continues to cut down costs to counter weak demand and will gain immensely from Trump's $1 trillion infrastructure spend plan.

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

Shares of Intel have gained only +0.4% since election results were announced on Nov 8, lagging the broader Tech sector (up +15.8%) as well as the red-hot semiconductors space (up +24%). Top-PC makers like HP, Lenovo, and Asus are set to launch PCs based on Qualcomm's ARM-based Snapdragon processor, which intensifies competition for Intel.

Additionally, increasing competition from AMD is also a headwind. Moreover, PC shipments are expected to remain sluggish due to increasing DRAM and NAND prices, which will hurt Intel's top-line growth going ahead in 2017. Nevertheless, the Zacks analyst thinks IBM's upcoming launch of Skylake will drive data center results in the second half.

The company revised its 2017 revenue and EPS outlook upward based on improving average selling price ASP. Further, anticipated improvement in cost structure and lower spending, primarily due to improving operational efficiency will aid in expansion of margins going forward. Additionally, aggressive share buyback will boost the bottom line in 2017. 

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

Monsanto's shares have outperformed the Zacks Agricultural/Products industry over the last three months, gaining +3.9% vs. +2.9%. The company reported better-than-expected fiscal second-quarter 2017 results. The Zacks analyst thinks increasing demand for crop-yield enhancing products, stronger innovation and success of Bayer's buyout deal will bolster Monsanto's top- and bottom-line performance in the quarters ahead.

However, stiff rivalry within the seeds, traits and agricultural chemical industry exposes the company to risks of market share loss. Moreover, a stronger U.S. dollar or weaker pricing conditions might weigh over the company's near-term results. Over the last 30 days, estimates have remained unchanged for fiscal 2017 but moved north for fiscal 2018.

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

Other noteworthy reports we are featuring today include General Electric (GE), General Motors (GM) and Raytheon (RTN).

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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>>>