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Top Research Reports with Q2 Earnings Analysis: Merck, CVS Health, CME Group & More

Kalyan Nandy
Buffett is bullish on banks. Should you follow him and bet on financial ETFs?

Friday, August 10, 2018

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features updated research reports on 16 major stocks, including Merck (MRK), CVS Health (CVS) and CME Group (CME). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Merck’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry year to date, gaining +17.3% versus +2.9%. The company beat both earnings and sales estimates in Q2. The Zacks analyst thinks new products like Keytruda, Lynparza, and Bridion should continue to contribute meaningfully to the company's top line. Keytruda sales are gaining momentum with approval for additional indications, especially in the first-line lung cancer setting, as it is the only anti-PD-1 approved in this setting. The Animal Health unit is also strong and remains a core growth driver for Merck. Meanwhile, Merck will continue to focus on cost-cutting initiatives. 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) will remain headwinds in 2018.

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

Shares of CVS Health have outperformed the Zacks Retail Pharmacies and Drug Stores industry in the last three months, gaining +6.5% versus +4.2%. CVS Health ended the second quarter of 2018 on a promising note with its earnings and revenues beating the respective expectations. The year-over-year growth in the top line was driven by strong Pharmacy Services segment, which benefitted from the upside in the specialty services. Also, year-over-year Retail/LTC comparisons were encouraging. The Zacks analyst thinks strong 2019 PBM selling season is another upside. The company currently is moving forward to the completion of the Aetna deal. According to CVS Health, this landmark acquisition might change the Healthcare landscape in the United States. On the flip side, the company apprehends to see fewer RFP opportunities in the market than what it has seen over the past few years. Also, according to management, Omnicare business performance should continue to remain soft through the second half of 2018.

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

CME Group’s shares have outperformed the Zacks Securities and Exchanges industry year to date, gaining +11.6% versus +5%. CME Group’s second-quarter 2018 earnings beat expectations and also improved year over year on higher trading volumes as well as revenues. The Zacks analyst thinks the company remains well-positioned for growth on a strong market position with diverse derivative product lines. Efforts to expand and cross sell its core exchange-traded business via new product initiatives and global reach also support growth. It intends to exit its credit default swap clearing business by mid-2018 and focus on over-the-counter clearing services on interest rate swaps as well as foreign exchange. This will free up $650 million as clearing member capital. Also, the buyout of Nex Group will help CME generate $200 million in run-rate cost synergies annually, by the end of 2021. However, exposure to interest-rate volatility and limited credit availability might hamper liquidity.

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

Other noteworthy reports we are featuring today include Manulife (MFC), Public Storage (PSA) and TD Ameritrade (AMTD).

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Note: Our Director of Research 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

New Drugs to Drive Merck's (MRK) Sales as Competition Soars


Declining RFP Prospects Worry CVS Health (CVS), AET Pact Advances


Higher Trading Volume Aids CME Group (CME), Rising Costs Ail


Featured Reports

Manulife (MFC) Poised for Grow on Strong Asia Business

Per the Zacks analyst, Manulife is set to grow on strong Asia business, expanding its wealth and asset management business and focus to lower costs, aiming $1 billion in expense savings by 2022.

Public Storage (PSA) Gains from Buyouts, Supply Woes Linger

Per the Zacks analyst, Public Storage is poised to gain from its high brand value, strategic acquisitions and robust presence in key cities. However, rising supply remains a concern.

Digital Innovations Aid TD Ameritrade (AMTD), High Cost Ails

Per Zacks analyst, TD Ameritrade's improved digital platforms have led to higher client activities, thus aiding revenues. Yet, costs related to ongoing investment in business remain a woe.

Cloud Business Aids CenturyLink (CTL) Amid Access Line Losses

Per the Zacks analyst, strong network capabilities and integrated hosting boosts CenturyLink's cash flow from cloud business.

Debt-free Position Aids T. Rowe Price (TROW), High Cost a Woe

Per the Zacks analyst, debt-free position with substantial liquidity has assisted in strengthening T. Rowe Price's capital leverage.

Ingersoll (IR) Grows on Robust HVAC Demand & Pricing Actions

Per the Zacks analyst, strong residential and commercial Heating, Ventilation and Air Conditioning (HVAC) sales will boost Ingersoll's profits going forward.

Strategic Investments, Customer Growth Aid Xcel Energy (XEL)

The Zacks analyst believes Xcel Energy's $18.5 B investment plan to strengthen operations will drive performance.

New Upgrades

Ligand (LGND) Benefits from Robust Growth of Partnered Drugs

Per the Zacks analyst, strong growth trend and blockbuster potential of two partnered drugs as well as encouraging progress of others boost the prospects of improving Ligand's top-line.

CyberArk (CYBR) Benefits From Strategic Buyouts & Deal Wins

Per the Zacks analyst, CyberArk is benefiting from its strategic acquisitions like Conjur and Vaultive. Moreover, deal wins in new as well as add-on business mostly from advisory firms are a tailwind.

Digital Investments, Cost Control Steps Aid MoneyGram (MGI)

Per the Zacks analyst, investments in technology have aided revenue growth & international expansion. Cost control efforts will help to protect margins when the topline growth is facing pressure.

New Downgrades

Input Cost Inflation to Hurt Dean Foods (DF) Bottom Line

Per the Zacks analyst, greater-than-expected increases in resin, freight, and fuel costs hurt Dean Foods' second quarter earnings. Cost inflation is likely to persist, which led to a lowered outlook.

Soft Print Advertising Demand to Hurt NY Times (NYT)

Per the Zacks analyst, soft print advertising and slower digital subscriber growth may hurt The New York Times Company. Third quarter advertising revenue is likely to fall in the low-single digits.

Pressure on Revenues, Brexit Uncertainty Hurt Barclays (BCS)

Per the Zacks analyst, muted revenue growth amid low interest rates remains a major concern for Barclays. Also, ambiguity related to the impact of Brexit will hurt its financials in the near-term.


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Public Storage (PSA) : Free Stock Analysis Report
 
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
 
Manulife Financial Corp (MFC) : Free Stock Analysis Report
 
CVS Health Corporation (CVS) : Free Stock Analysis Report
 
CME Group Inc. (CME) : Free Stock Analysis Report
 
TD Ameritrade Holding Corporation (AMTD) : Free Stock Analysis Report
 
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