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The Zacks Analyst Blog Highlights: Amazon.com, Walt Disney, Apple, Alphabet and General Electric

For Immediate Release

Chicago, IL – May 16, 2016 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Amazon.com Inc. (AMZN), The Walt Disney Company (DIS), Apple Inc. (AAPL), Alphabet Inc. (GOOGL) and General Electric Company (GE).

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Here are highlights from Friday’s Analyst Blog:

Dow 30 Stock Roundup

The Dow remained nearly flat over the week as oil prices continued to determine market direction. Earnings also had a limited impact on the proceedings. Disappointing earnings results from a key impact led to losses on Wednesday. Initial claims touched a record high, putting another rate hike in doubt since employment numbers for April have also been dismal. A tech major’s record fall also hurt the index, which was offset by gains in consumer staples and telecom stocks. The Dow has remained nearly unchanged over the first four trading days of the week.

Last Week’s Performance

The index declined 0.2% on Monday even after gains in healthcare stocks offset declines in energy stocks. Oil prices declined after the impact of Canadian wildfire on crude output declined. Moreover, Saudi Arabia’s oil minister Ali al-Naimi was replaced by the kingdom’s state oil company, Saudi Aramco’s chairman Khalid al-Falih. This in turn raised uncertainty over the oil policy of one of the leading oil producing countries of the world.

Also, crude inventories in the delivery hub of Cushing, Oklahoma have reportedly increased 1.4 million barrels last week. Both the WTI crude and Brent crude fell 2.8% and 4% to $43.44 per barrel and $43.63 a barrel, respectively.

Additionally, as per preliminary data reported by China’s General Administration of Custom, its oil imports increased 7.6% last month from a year ago. However, imports and exports declined 10.9% and 1.8%, respectively, year over year. Meanwhile, foreign exchange reserves of the world’s second largest economy rose for the second consecutive month to $3.22 trillion last month.

The index increased 1.3% on Tuesday following a rebound in oil prices and gains in shares of Amazon.com Inc. (AMZN). Oil prices rebounded after disruptions in Nigeria and Canada reduced crude oversupply worries to a significant extent. A series of militant attacks on oil infrastructure in Nigeria last week had reduced its crude production to 1.69 million barrels per day (bpd), hitting its lowest level in 22 years.

Moreover, in a monthly report issued yesterday, the U.S. Energy Information Administration (EIA) raised its guidance for crude prices as well as production for 2017. Both the WTI crude and Brent crude rose 2.7% and 4.2% to $44.66 per barrel and $45.52 a barrel, respectively.

Amazon’s shares rose 3.4% crossing the $700 mark for the first time to close at a record high of $703.07 after a Bernstein analyst said Amazon is undervalued and is likely to rise by almost 50% to reach the $1000 per share mark by 2017.

The index decreased 1.2% on Wednesday following the slump in shares of The Walt Disney Company (DIS). Decline in Disney’s and other retailers’ shares dragged retail stocks down, which in turn had a negative impact on the broader consumer discretionary sector. The Dow registered its worst one-day decline since Feb 11. Shares of Disney declined 4%, posting the worst one-day fall since Jan 15, after the company missed earnings estimates for the first time in nearly five years.

However, oil prices rose after the EIA reported that U.S. commercial crude oil inventories fell 3.4 million barrels to 540 million for the week ended May 6. This was in sharp contrast to analysts’ expectations of a 714,000 barrel rise. Moreover, total motor gasoline inventories fell by 1.2 million barrels last week. Fall in crude oil and gasoline inventories had a positive impact on oil prices.

The index gained 0.1% on Thursday even after shares of Apple Inc. ( AAPL) declined to a two-year low. Shares of Apple hit their lowest closing level since Jun 2014, following concerns over a slump in iPhone sales. Reportedly, its Taiwanese suppliers expect a fall in iPhone orders in the latter part of 2016 following weak demand. Total market cap of Apple declined to $494.7 billion, lower than Alphabet Inc.’s (GOOGL) market cap of $494.9 billion, making Google the world’s biggest company.

Components Moving the Index

Disney disappointed investors after missing earnings estimates for the first time in nearly five years. The company reported second-quarter fiscal 2016 earnings per share of $1.36 that fell short of the Zacks Consensus Estimate of $1.40. Nonetheless, the company’s earnings increased 11% year over year.

On the other hand, revenues increased 4% year over year to $12,969 million but missed the Zacks Consensus Estimate of $13,255 million. Notably, the company’s top line had beaten estimates in the previous quarter.

The company’s lower-than-expected results are primarily attributed to fall in Cable Networks and Consumer Products & Interactive Media businesses. Falling subscriber base and higher programming costs of these businesses have been a cause of worry for investors for quite some time now.

In the reported quarter, ESPN’s ratings were affected by a change in time of bowl games. ESPN’s ad revenues declined 13%. So far, in the fiscal third quarter ESPN ad revenues have increased 5% year over year.

General Electric Company ’s (GE) division GE Power recently inked an agreement to acquire Doosan Engineering & Construction’s Heat Recovery Steam Generator (HRSG) business. The acquisition is likely to be worth $250 million.

The HRSG technology is a combined-cycle power plant that captures the exhaust heat from the gas turbine. Water is converted into steam, which in turn is used to drive a steam turbine to produce additional power output. This technology can help generate approximately 33% of the plant’s total power output.

As a business unit of Doosan Engineering & Construction, the acquired business manufactures and distributes HRSGs to combined-cycle power plants worldwide.

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AMAZON.COM INC (AMZN): Free Stock Analysis Report
 
DISNEY WALT (DIS): Free Stock Analysis Report
 
APPLE INC (AAPL): Free Stock Analysis Report
 
ALPHABET INC-A (GOOGL): Free Stock Analysis Report
 
GENL ELECTRIC (GE): Free Stock Analysis Report
 
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