Wednesday, February 6, 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 Procter & Gamble (PG), Becton, Dickinson (BDX) and Dominion Energy (D). 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 Procter & Gamble’s shares have outperformed the Zacks Soap and Cleaning Materials industry in the past three months, gaining +6.7% vs +4%. The Zacks analyst thinks that this can be attributed to owing to strong second-quarter fiscal 2019 results, robust earnings trend and upbeat view for fiscal 2019. Top and bottom line beat estimates in the fiscal second quarter, marking 15th straight earnings beat and fifth sales beat in the last six quarters.
Earnings benefited from the tax reforms, while strong organic growth with higher shipment volumes and favorable price/mix boosted sales. The company raised the sales guidance for fiscal 2019. It is also gaining from focus on product improvement, packaging and marketing initiatives, and productivity and cost-savings plan.
However, it is witnessing strained margins owing to increased commodity and shipping costs, higher brand investments and aggressive pricing from private-label products amid intense competition. Moreover, adverse currency rates are hurting P&G’s results, which is likely to continue in fiscal 2019.
(You can read the full research report on Procter & Gamble here >>>).
Shares of Becton, Dickinson have outperformed the Zacks Dental Supplies industry over the past year, gaining +9.2% vs. -3.3%. Becton Dickinson, also known as BD, exited the fiscal first quarter on a mixed note. While earnings met estimates, revenues lagged the same.
The Zacks analyst likes the solid performance of the core BD Medical and Life Sciences units. Domestic and international revenues increased year over year in the quarter. Management is optimistic about the C.R. Bard buyout which has been consistently proven accretive. Notably, a series of product launches and regulatory approvals continue to boost the stock. The company has kept its fiscal 2019 guidance intact.
However, contraction in gross and operating margins in the quarter is worrisome. Customer ordering patterns are also expected to negatively impact fiscal second-quarter results. Management expects unfavorable foreign currency to partially mar BD’s prospects in fiscal 2019. Stiff competition in the MedTech space adds to the woes.
(You can read the full research report on Becton, Dickinson here >>>).
Dominion Energy’s shares have gained +1.2% over the past six months, underperforming the Zacks Electric Power industry, which has increased +5.2% over the same period. Dominion Energy missed fourth-quarter earnings estimates due to lower renewable energy investment tax credits, higher storm restoration cost and increased interest expense.
The Zacks analyst thinks Dominion Energy is benefiting from its regulated growth projects and synergies from acquisition. The company’s expansion of electric transmission, natural gas facilities and midstream assets are strong positives. The company completed its merger with SCANA and it is likely to be immediately accretive to earnings.
However, any delay in the ongoing capital projects may impact Dominion Energy’s profitability. Moreover, increase in pension expenses and share dilution may affect future earnings. The company and its gas unit’s dependency upon third-party producers for natural gas supply increases risk.
(You can read the full research report on Dominion Energy here >>>).
Other noteworthy reports we are featuring today include Altria (MO), Chubb (CB) and Estee Lauder (EL).
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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
P&G's (PG) Productivity & Cost Savings Plan to Drive Profits
BD Medical Aids Becton, Dickinson (BDX) Amid Competition
Dominion (D) Gains from Investments, Share Dilution a Concern
Rising Demand aids Raytheon (RTN), Macroeconomic Risks hurt
Per the Zacks analyst, Raytheon enjoys solid order inflows from overseas courtesy its combat-proven defense products. However, macroeconomic risks related to competition and rate risks hurts Raytheon.
Allergan (AGN) Rides on Botox Sales, Generic Woes Remain
Allergan's key products like Botox are supporting sales. However, loss of exclusivity for key drugs like Restasis and likely new competitors to Botox in 2019 is a concern per the Zacks analyst.
Robust Distributable Cash Flow to Boost Magellan (MMP)
The Zacks analyst believes that Magellan Midstream's growing distributable cash flow should help it to hike payouts but is concerned about the weak outlook for its crude oil transportation unit.
Jet Demand, Cash Position to Aid Spirit AeroSystems (SPR)
Per the Zacks analyst, growing demand for commercial jets worldwide should boost Spirit AeroSytems' growth.
DiaSorin Partnership Aids QIAGEN (QGEN), Americas Sales Hurt
The Zacks analyst looks forward to QIAGEN's partnership with DiaSorin which is improving its position in automated TB testing.
Super-spec Rigs Aid Helmerich (HP) Amid International Woes
While the technologically advanced FlexRig gives Helmerich an edge, buoying its margins, the Zacks analyst believes that reduced international activities may impact the firm's overall results.
Methanol Demand to Aid Methanex (MEOH) Amid Pricing Woes
Per the Zacks analyst, Methanex should gain from healthy demand fundamentals for methanol.
Solid Travel Retail Business to Fuel Estee Lauder (EL) Sales
Per the Zacks analyst, Estee Lauder sales are set to gain from efforts to enhance travel retail, which saw solid growth in the second quarter due to traffic, effective launches and marketing plans.
Rising Top-line, Robust Inorganic Growth Aid Centene (CNC)
Per the Zacks analyst, Centene's growing revenues driven by contract wins and rising admissions has led to significant growth. Acquisitions of MHM Services and Fidelis Care are other positives.
Palo Alto Networks (PANW) Rides on Product Upgrades, Buyouts
Per the Zacks analyst, Palo Alto's focus on product refreshes and prudent acquisitions like Secdo and RedLock will steadily widen its portfolio and global reach, thus boosting its top line.
Lower Cigarette Volumes Continue to Trouble Altria (MO)
Per the Zacks analyst, declining cigarette volumes have been denting Altria's performance, as witnessed in fourth-quarter 2018. Cigarette industry volumes are likely to fall 3.5-5% in 2019.
Chubb's (CB) Escalating Expenses Continue to Raise Concerns
Per the Zacks analyst, Chubb's rising expenses, due to higher loss adjustment expenses, policy acquisition costs plus administrative expenses, will continue to restrict operating margin expansion.
Reduced Well Completion Activity Hurts Baker Hughes (BHGE)
The Zacks analyst thinks the reduction in well completion activity and the drop in business volume of Flexible Pipe are major headwinds for Baker Hughes.
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Altria Group, Inc. (MO) : Free Stock Analysis Report
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