Monday October 16, 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 AbbVie (ABBV), American Express (AXP) and Abbott (ABT). 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 shares have gained +44.8% year to date, outperforming the Zacks Large Cap Pharmaceuticals industry, which has gained +18.3% over the same period. The Zacks analyst likes the strong performance of AbbVie’s key drug Humira which should continue to do well. Moreover, Imbruvica has multibillion dollar potential and AbbVie is exploring the possibility of label expansion into solid tumors and autoimmune diseases.
Meanwhile, AbbVie has promising pipeline with several pivotal data readouts and regulatory milestones due in the second half. Maviret, approved recently, has the potential to rejuvenate AbbVie’s struggling HCV franchise. However, though Humira is doing well, the company is concerned about the product’s long-term growth prospects, given potential biosimilar competition.
Viekira also faces intense pricing and competitive pressure in the HCV market. Estimates have gone up slightly ahead of the company’s Q3 earnings release. AbbVie has had a mixed record of earnings surprises in the recent quarters.
(You can read the full research report on AbbVie here >>>).
Shares of American Express are up +55.1% over the last one year, outperforming the Zacks Financial Miscellaneous Services industry, which has gained +34% over the same period. The Zacks analyst likes its solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments.
The company is gaining from investments made in growth opportunities over the last couple of years. Strategic initiatives focusing on the platinum card portfolio and OptBlue program will drive business volume. Cost reduction and return of significant capital to shareholders through dividend and share buyback are other positives.
The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 0.5% upward over the last 90 days. However, an increase in provision for losses, foreign exchange volatility, loss of Costco as a client and intense competition remain major near-term concerns.
(You can read the full research report on American Express here >>>).
Buy-rated Abbott’s shares have gained +12.1% over the last three months, outperforming the Zacks Medical Products industry, which has gained +0.3% over the same period. Ahead of Abbott's third-quarter 2017 earnings result, the Zacks analyst likes the promising full year guidance which is indicative of brighter prospects ahead. In fact, the strong guidance is backed by the company’s expectations to gain more synergies from the St. Jude merger.
Overall, Abbott’s plan to expand in core therapeutic areas is cause for encouragement. Recently, the company's FreeStyle Libre Flash received the FDA approval. Also, the company has received FDA approval for magnetic resonance-conditional labeling for its Ellipse implantable cardioverter defibrillator recently.
On the flip side, Abbott’s sluggish pediatric business in China continues to dent growth. Management is also concerned about the economic problems in Venezuela that are expected to remain unresolved for some time.
(You can read the full research report on Abbott here >>>).
Other noteworthy reports we are featuring today include Emerson Electric (EMR), United Technologies (UTX) and VMWare (VMW).
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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
AbbVie's (ABBV) Humira Lifts Sales; Maviret to Aid HCV Franchise
Cost Control Aids AmEx (AXP), High Loan Loss Provision Hurts
Abbott (ABT) Thrives on New Product Launches, St Jude Synergy
WestRock (WRK) Rides on Rising Corrugated Packaging Demand
The Zacks analyst appreciates WestRock Company's strategy to grow through acquisitions to capitalize on the growing demand for corrugated packaging.
Macy's (M) Omnichannel Strategy to Help Counter Waning Comps
Per the Zacks analyst, declining comps and mall traffic as well as waning margins are concerns. However, Macy's price optimization, cost containment and omnichannel strategy may help lift performance.
VMware (VMW) Partners SAP for IoT, Stiff Competition Hurts
Per the Zacks analyst, VMware is expected to benefit from the SAP partnership in the Internet of Things (IoT) market. However, stiff competition from Microsoft is expected to hurt growth.
Digital Innovations Support Fidelity (FIS), Debt Level Hurts
Per Zacks analyst, Fidelity's investment in mobile banking and innovative products such as PayNet and BuyWay keep it well poised for growth.
New Launches Aid Baxter (BAX) Amid Cyclophosphamide Worries
The Zacks analyst is bullish on Baxter's launch of DeviceVue, an asset tracking solution for hospitals. However, lower cyclophosphamide sales are likely to mar Baxter's bottom line in the near term.n
Restaurant Brands (QSR) Sales Push Solid, Industry Woes Remain
Per the Zacks analyst, Restaurant Brands' sales boosting initiatives like product launches and promotional offerings are likely to drive growth.
Emerson (EMR) to Gain from Strong HVAC Demand, Margins Weak
Per the Zacks analyst, Emerson is enjoying robust demand in global HVAC and refrigeration markets, higher optimization projects and MRO activity.
KLA-Tencor (KLAC) Benefits from Yield Management Solutions
The Zacks analyst believes that KLA-Tencor's complete yield management solutions, including hardware, software and services, help to keep its revenues stable relative to other equipment suppliers.
Speedway Assets to Boost Marathon Petroleum (MPC) Growth
The Zacks analyst believes that Marathon Petroleum's Speedway convenience store business will help in generating long-term returns for shareholders due to healthy merchandise margins.
Harris Corp's (HRS) Investor-friendly Approach Bodes Well
The Zacks analyst is impressed by the company's efforts to reward shareholders. The possibility of higher military spending due to the North Korea tensions have boosted stocks like Harris.
United Technologies (UTX) Marred By Risks Related to Brexit
Per the Zacks analyst, susceptibility to high operating risks related to Brexit, availability of raw materials and technological obsolescence of products mar the profitability of United Technologies.
Embraer (ERJ) Hurt by Stiff Competition & Higher Penalties
Per the Zacks analyst, Embraer might need to pay higher penalties that will bring further losses for it going forward. Again, to survive in a competitive space it may need to incur high costs.
FedEx (FDX) Stung by High Costs at its Ground Unit
High costs due to significant investments at its Ground unit and TNT Express integration expenses are limiting bottom-line growth. The TNT Express cyberattack also worries the Zacks analyst.
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Vmware, Inc. (VMW) : Free Stock Analysis Report
United Technologies Corporation (UTX) : Free Stock Analysis Report
Emerson Electric Company (EMR) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
Abbott Laboratories (ABT) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
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