U.S. Markets open in 8 hrs 43 mins

Top Research Reports for Chevron, Merck & Walgreens Boots

Mark Vickery

Friday, June 28, 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 Chevron (CVX), Merck (MRK) and Walgreens Boots (WBA). 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 >>>

Outperform-rated Chevron’s shares have outperformed the Zacks Integrated Oil industry year to date (+13.2% vs. +7.9%). The Zacks analyst thinks Chevron is poised for further capital appreciation, riding on its healthy earnings growth prospects.

America’s No. 2 energy company’s financial results have greatly improved over the past few quarters, primarily aided by surging production and free cash flow turnaround. In fact, Chevron's free cash flow and upstream production for 2018 hit a record. The company’s existing oil and gas development project pipeline is among the best in the industry, targeting a CAGR of 3-4% through 2023 thanks to the planned expansion in the Permian Basin.

Moreover, growing free cash flow should enable Chevron to deliver stable and rising dividends in the foreseeable future. Consequently, Chevron is viewed as a preferred supermajor to own now.

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

Shares of Outperform-rated Merck have increased +9.7% year to date, outperforming the Zacks Large Cap Pharmaceuticals industry’s gain of +2% during the same period. The Zacks analyst thinks Merck’s new products like Keytruda, Lynparza and Bridion are contributing meaningfully to the top line.

Keytruda sales are gaining momentum with approval for additional indications, especially in the first-line lung cancer setting. Keytruda has strong growth prospects based on increased utilization, recent approvals for new indications and potential additional approvals worldwide. Animal health and vaccine products are also performing strongly and remain core growth drivers for Merck.

However, generic competition for several drugs and pricing pressure will continue to be overhangs on the top line. Rising competitive pressure on the diabetes franchise and products like Isentress (HIV), Zepatier (HCV) and Zostavax (vaccine) remain concerns.

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

Walgreens Boots’s shares have underperformed the Zacks Drug Stores industry over the past three months, losing -13.8% vs. -6.4%. Walgreens Boots’ third-quarter fiscal 2019 adjusted earnings and revenues outpaced their respective expectations.

The Zacks analyst thinks the Retail Pharmacy USA division is witnessing comparable prescription growth and benefitting from a strong retail prescription market. The Pharmaceutical Wholesale division too continues to register strong growth.

On the flip side, Walgreens Boots believes that pharmacy trends, which are hurting the overall market, are likely to continue to do so over the coming months. Walgreens Boots reported poor margins in the third quarter largely due to turbulence in the UK consumer markets, low generic deflation, brand inflation and increased reimbursement pressure.

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

Other noteworthy reports we are featuring today include FedEx (FDX), Allstate (ALL) and Loews (L).

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>

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

Chevron (CVX) to Gain from Stellar Permian Operation

Keytruda Key to Merck's (MRK) Long Term Growth Prospects

Retail USA Growth Aids Walgreens (WBA) Amid Reimbursement Woes

Featured Reports

Productivity Actions Aid Celanese (CE), Weak Demand Ails

Per the Zacks analyst, operational cost savings through productivity actions will drive Celanese's profitability. However, lower global demand will hurt the company's volumes.

Cost Savings Strategy Aids Deutsche Bank (DB) Amid Low Rates

Per the Zacks analyst, cost-savings efforts to drive efficiency are encouraging and might neutralize impact of high legal costs, going forward.

Hyatt (H) Relies on Expansion & Acquisition Amid Competition

Per the Zacks analyst, Hyatt's acquisition and divestitures is strengthening liquidity. Also, global expansion helps the company gain market share amid a competitive environment

Aerospace & Electronics Drive Crane (CR), High Costs Hurt

Per the Zacks analyst, solid traction of Crane's Aerospace & Electronics segment fueled by strength in commercial & military aftermarket businesses should drive its sales. High costs remain a concern.

American Eagle's (AEO) Solid Comps Trend to Drive Growth

Per Zacks analyst, comps are benefiting from compelling merchandise, brand strength, digital and in-store businesses.

Expansion Plans Aids Triumph (TGI), Commodity Prices Hurt

Per the Zacks analyst, Triumph Group's focus on the expansion of its product capabilities will lead to impressive growth, going ahead.

Pharmacy Services Boost Rite Aid (RAD), Reimbursement A Worry

Per the Zacks analyst, enrollment of Medicare Part D has been boosting Rite Aid's Pharmacy Services revenues.

New Upgrades

GATX Rides High on Dividends & Share Buybacks

The Zacks analyst is impressed by GATX's measures to reward shareholders through dividends and share buybacks. Additionally, the company's efforts to expand its fleet are encouraging.

Loans, Higher Rates Aid Commerce Bancshares (CBSH) Revenues

Per the Zacks analyst, robust rise in demand for loans, relatively higher rates, strong balance sheet position and focus on improving fee income will support Commerce Bancshares' revenue growth.

Loews (L) Set to Grow on Solid Insurance, Hotel Business

Per the Zacks analyst, Loews is well poised to grow on strength of its hotel business, strong insurance business, robust network of manufacturing locations and sturdy balance sheet.

New Downgrades

FedEx (FDX) Hurt by High Costs, Weak Express Division

The Zacks analyst is concerned about increased costs, particularly at FedEx's Ground unit. Weakness at its major revenue generating segment, FedEx Express, is also worrisome.

High SG&A costs Likely to Hurt Foot Locker's (FL) Margins

Per the Zacks analyst, rising SG&A costs may weigh upon Foot Locker's margins in the near term. For the second quarter, Foot Locker expects SG&A expenses rate to increase 80-100 basis points.

Catastrophe Losses, Rising Expenses Weigh on Allstate (ALL)

Per the Zacks analyst, exposure to catastrophe losses have imparted volatility to the company's underwriting results. Also, rising expenses weigh on margins.

undefined undefined
Walgreens Boots Alliance, Inc. (WBA) : Free Stock Analysis Report
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
Loews Corporation (L) : Free Stock Analysis Report
FedEx Corporation (FDX) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
The Allstate Corporation (ALL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research