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Top Research Reports for Philip Morris, Amgen & Union Pacific

Mark Vickery
Top Research Reports for Philip Morris, Amgen & Union Pacific

Friday, September 15, 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 Philip Morris International (PM), Amgen (AMGN) and Union Pacific (UNP). 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 >>>

Shares of Philip Morris have outperformed the Zacks categorized Tobacco industry on a year-to-date basis (+27.6% vs. +9.3%), primarily due to its strong portfolio of tobacco brands and pricing power. It is encouraging that the company is churning its portfolio and taking steps to develop smoke-free products as customers are shifting away from tobacco products. In fact, Philip Morris remains focused on the growing e-cigarettes and less harmful alternative products such as heatsticks and iQOS products.

Furthermore, the marketing and technology-sharing agreement between Philip Morris and its peer Altria Group is also boosting the businesses of both the companies and will help them maintain the market share. However, strict government regulations, declining demand for cigarettes and currency headwinds remain major concerns for the company.

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

Amgen’s shares have outperformed the industry so far this year, increasing +29.6% vs. +15.4%. Amgen is well positioned for growth with several blockbuster drugs in its portfolio. Amgen’s newer drugs – Prolia, Xgeva, Vectibix, Nplate and Sensipar – are all performing well. Additionally, Amgen’s restructuring plan should make it leaner and more cost efficient. Amgen is also progressing with its pipeline, including biosimilar drugs.

However, the company has some challenges in store, given the presence of biosimilar competition and slowdown in sales of mature products. Volume growth of new drugs may not be enough to offset lost sales due to the decline in mature brands. While Neupogen is already facing U.S. biosimilar competition, Neulasta and Epogen could start facing the same next year. Also the softness in Enbrel sales due to stiff competitive pressure is a key cause for concern. Meanwhile, uptake of Repatha has been slow due to payer restrictions.

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

Shares of Union Pacific have underperformed its industry as well as fellow railroad operator Norfolk Southern on a year-to-date basis. While the company has gained +6.9%, the industry in belongs to and Norfolk Southern have rallied +17% and +17.5%, respectively, so far this year. Notably, the bleak outlook for the third quarter of 2017 unveiled by Union Pacific on its automotive unit is a matter of concern. Units like agricultural products and chemicals are also expected to registar below-par volumes in the same quarter.

However, the company's efforts to cut costs to drive the bottom line are encouraging. In fact, we are also impressed with Union Pacific’s plans to reward investors through share buybacks and dividend payouts. Additionally, improvement in the coal-related scenario raises optimism, going forward.

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

Other noteworthy reports we are featuring today include Oracle (ORCL), United Technologies (UTX) and Aflac (AFL).

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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

Philip Morris (PM) Relies on Smoke-Free Products for Profits

Amgen's (AMGN) New Drugs Driving Sales Amid Headwinds

Cost-Cuts Aid Union Pacific (UNP) Amid Automotive Unit Woes

Featured Reports

Magellan's (MMP) Distribution Coverage Healthy, Debt a Woe

While appreciating Magellan Midstream's healthy distribution coverage, the Zacks analyst remains concerned over the partnership's high debt-to-equity ratio.

Oracle (ORCL) Banks on Cloud SaaS, Next-Generation Database

Per Zacks analyst, Oracle's robust cloud-based SaaS portfolio is the growth driver. The upcoming next-generation database is also a key catalyst.

Divestiture Aids McKesson (MCK) amid Solid Pricing Pressure

In an initiative to focus on core strength, McKesson's divested Enterprise Information segment recently. The Zacks analyst is bearish on pricing pressure in the independent retail pharmacy channel.

NiSource (NI) Poised to Gain from $30B Infrastructure Spends

The Zacks analyst believes NiSource is poised to gain from its strategic investments of $30 billion aimed to strengthen its gas and electric operation.

United Technologies' (UTX) Rockwell Deal Marred by Brexit

Per the Zacks analyst, United Technologies' acquisition of Rockwell Collins is likely to be accretive in the long term although risks due to Brexit remain potential headwinds.

V.F. Corp. (VFC) to Gain from Solid Direct-to-Consumer Sales

Per the Zacks analyst, V.F. Corp. should continue gaining from its direct-to-consumer business that grew 14% in the second quarter. Management also raised its DTC sales view, reflecting its prospects.

Rising Rates, Loan Growth to Support Zions' (ZION) Revenues

The Zacks analyst opines an increase in loan demand and improving rate scenario will support Zions' revenue growth going forward.

New Upgrades

General Mills' (GIS) Restructuring Plans to Spur Growth

Per the Zacks analyst, supply chain restructuring initiative along with consumer-focused innovation, marketing and cost saving initiatives are making up for the sluggish sales growth at General Mills.

Aflac (AFL) Gains from Strong U.S. Segment, Capital Position

The Zacks analyst favorably views the strength in the company's U.S. segment that witnessed revenue growth for several years. Also, its strong balance sheet has enabled dividend hikes for 34 years.

Cummins (CMI) to Gain From Its Electric Truck Production

Per the Zacks analyst, the newly unveiled fully electric Class 7 heavy-duty truck for bus and commercial truck operators will help Cummins to retain its dominant position in the truck market.

New Downgrades

High Costs, Nonperforming Assets Hurt Northern Trust (NTRS)

Per the Zacks analyst, rising costs on ongoing investments in technology driven compensation expenses remain a headwind for Northern Trust. Moreover, high non-performing assets are a concern.

Nordson (NDSN) Suffers From High Costs of Sales, View Weak

Per the Zacks Analyst, Nordson Corporation's (NDSN) rising costs of sales, up 21.5% in third-quarter fiscal 2017, is a concerning factor. Margin is projected to fall in the fiscal fourth quarter.

Old Pipelines, High Debts may Impact American Water (AWK)

The Zacks analyst believes American Water Works aging water infrastructure could impact its operations and rising debt levels amid increasing interest environment can lower profitability.

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United Technologies Corporation (UTX) : Free Stock Analysis Report
Union Pacific Corporation (UNP) : Free Stock Analysis Report
Philip Morris International Inc (PM) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
Aflac Incorporated (AFL) : Free Stock Analysis Report
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