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Top Analyst Reports for AbbVie, Union Pacific & CSX

Mark Vickery

Wednesday, September 18, 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 AbbVie (ABBV), Union Pacific (UNP) and CSX (CSX). 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 >>>

AbbVie’s shares have underperformed the Zacks Large-Cap Pharmaceuticals industry over the past three months (-7.8% vs. -5.5%). The Zacks analyst thinks that AbbVie’s key drug, Humira, is performing well based on strong demand trends despite new competition. Imbruvica has multibillion-dollar potential.

AbbVie has been successful in expanding approvals for its cancer drugs, Imbruvica and Venclexta. Moreover, AbbVie has an impressive late-stage pipeline, comprising several products with multibillion-dollar potential that are expected to be launched in the near term. The acquisition of Allergan, if successful, should diversify AbbVie’s revenue base and accelerate its non-Humira business.

Sales erosion due to direct biosimilar competition to Humira in international markets is a big headwind in 2019. Also, costs to support expected new product/line extension launches should hurt profits in 2019.

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

Shares of Union Pacific have gained 3.9% in the past six months, outperforming the Zacks Rail industry’s rise of 3.5%. The Zacks analyst is impressed with Union Pacific's initiatives to reward its shareholders. Since November 2017, the company has raised its quarterly dividend payout five times.

It is also active on the buyback front. Initiatives to control costs in a bid to drive the bottom line are also impressive. The company’s operating ratio has been improving mainly due to its cost-cut plans. The metric is expected to improve further going forward. However, sluggish freight volumes (down 3% in first-half 2019) represent a major headwind.

Anticipating the dull scenario to persist, Union Pacific trimmed its volume growth outlook for the second half of the year. Its high debt levels are an added concern. In addition, the massive capex might play spoilsport.

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

CSX’s shares have gained 14.6% year to date, underperforming the Zacks Rail industry’s rise of 21.2% over the same period. The Zacks analyst believes that this was primarily due to sluggish intermodal revenues.

Dismal performance of the intermodal segment is affecting the company's growth prospects. Segmental revenues declined in the first half of 2019 due to lower volumes. In fact, this coupled with factors like weak domestic coal demand and sluggish crude-by-rail volumes forced the company to trim its current-year top-line forecast.

However, we are impressed by the company's efforts to control costs. CSX's operating ratio has improved in the first half of the year, courtesy of its cost-reduction efforts. The company's initiatives to reward its shareholders are encouraging as well. During the first half of 2019, the company returned $2 billion to shareholders through a combination of dividends and share buybacks.

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

Other noteworthy reports we are featuring today include PetroChina (PTR), Danaher (DHR) and ONEOK (OKE).

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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>>>

Today's Must Read

AbbVie's (ABBV) Humira U.S. Sales Strong; Pipeline Solid

Cost Cuts Boost Union Pacific (UNP) Amid Freight Weakness

Cost-Reduction Efforts Support CSX's Growth Prospects

Featured Reports

Higher Production in Productive Regions to Aid ONEOK (OKE)

Per the Zacks analyst, capital growth projects in the Permian Basin, STACK and SCOOP will increase ONEOK's natural gas and NGLs production volumes.

World Wrestling (WWE) New Content Creation to Lift Revenues

Per the Zacks analyst World Wrestling's focus on content creation, driving subscriber count, raising TV rights fees and monetization of video content across digital and DTC platforms bodes well.

Solid Insurance Business Drives W.R. Berkley (WRB)

Per the Zacks analyst, W.R. Berkley is poised to grow from its solid insurance operations driving lion's share of premium.

Rising Loans Aid First Republic (FRC), Capital Level Solid

Per the Zacks analyst, organic growth remains a key strength at First Republic. Higher revenues reflect improving loan and deposit balances.

High Shipments Aid Martin Marietta (MLM), Weather Woes Stay

Per the Zacks analyst, Martin Marietta is poised to benefit from higher shipments, strong pricing and cost-management efforts.

Domain, Hosting and Presence Segments Benefit GoDaddy (GDDY)

Per the Zacks analyst, GoDaddy banks on strong liquid domain aftermarket and renewals, and growing adoption of GoCentral.

SemGroup (SEMG) Aided by Energy Transfer Deal Amid High Debt

The Zacks analyst believes that SemGroup shareholders stand to gain from the substantial premium they will get as part of the Energy Transfer buyout.

New Upgrades

Standard Motors (SMP) Rides High on Pollak Acquisition

Solid revenue growth from the Engine Management unit on the back of the Pollack buyout prompts the Zacks analyst to turn bullish on Standard Motors (SMP).

USB Flash Drive Product Rollouts Aid Western Digital (WDC)

Per the Zacks analyst, new product additions will enhance the Western Digital's existing product portfolio and aid it in securing a strong foothold in the global SSD market.

Inorganic Moves & Innovative Products to Aid Danaher (DHR)

Per the Zacks analyst, Danaher's (DHR) buyout of GE's BioPharma business (pending) and separation of its dental unit will be boon. High demand for innovative products also adds value.

New Downgrades

Natural Gas Import Losses Weigh on PetroChina (PTR)

The Zacks analyst is worried over PetroChina's losses on the domestic resale of imported natural gas below cost. The drop in the company's downstream segment earnings is also a concern.

Weak Pressure Pumping Market to Hurt ProPetro (PUMP)

The Zacks analyst is concerned over the weak market sentiment and lower pricing with respect to pressure pumping services in the Permian Basin, which is expected to weigh on ProPetro's revenues.

Weak End-Markets, Economic Volatility to Hurt Amphenol (APH)

Per the Zacks analyst the geopolitical uncertainty, particularly related to the U.S.-China relationship, and a sluggish macro-economic environment in China doesn't bode well for the company.

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Union Pacific Corporation (UNP) : Free Stock Analysis Report
PetroChina Company Limited (PTR) : Free Stock Analysis Report
ONEOK, Inc. (OKE) : Free Stock Analysis Report
Danaher Corporation (DHR) : Free Stock Analysis Report
CSX Corporation (CSX) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
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