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Top Stock Reports for AbbVie, Starbucks & Phillips 66

Mark Vickery

Wednesday, October 2, 2019

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including AbbVie (ABBV), Starbucks (SBUX) and Phillips 66 (PSX). 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’s shares have outperformed the Zacks Large-Cap Pharmaceuticals industry in the past three months (2% vs. -3.7%). The Zacks analyst believes that AbbVie’s key drug, Humira, is performing well on strong demand despite competition.

Imbruvica has multibillion-dollar potential. AbbVie has been successful in expanding approvals for its cancer drugs, Imbruvica and Venclexta. Moreover, the company has an impressive late-stage pipeline comprising products with multibillion-dollar potential, expected to be launched in the near term. Meanwhile, the acquisition of Allergan, if successful, should diversify AbbVie’s revenue base and accelerate its non-Humira business.

However, AbbVie’s shares have underperformed the industry so far this year. Sales erosion due to direct biosimilar competition to Humira in international markets is a big headwind in 2019. Also, costs to support expected new product/line extension launches should hurt profits this year.

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

Shares of Starbucks have gained 37.3% year to date, outperforming the Zacks Food & Restaurants industry’s rise of 26.1%. The Zacks analyst believes that this momentum will continue as the company reported solid third-quarter fiscal 2019 earnings and also raised its full-year view.

Notably, earnings surpassed estimates in each of the trailing five quarters. Robust Americas and CAP comps bode well. The company now anticipates global comps growth of nearly 4%. Non-GAAP EPS is expected to be $2.80-$2.82, up from $2.75-$2.79 guided previously. Meanwhile, Starbucks' business is rapidly growing in China, courtesy of innovative store designs and the success of the MSR program.

Also, operating fundamentals such as solid global footprint, successful innovation, best-in-class loyalty program and digital offerings are encouraging. However, operating margin contraction over the past few quarters has been a concern.

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

Phillips 66’s shares have gained 8.3% in the past six months, outperforming the Zacks Oil Refining and Marketing industry’s rise of 1.9%. The Zacks analyst believes that Phillips 66 is well positioned to gain from rising demand for midstream assets in the United States, where takeaway capacity constraint is a potent problem.

Precisely, with its oil and gas pipeline network spreading across 21,000 miles, the company is an industry leader in the midstream business. Moreover, Phillips 66 is committed toward returning cash to stockholders through dividend payments and share repurchases. Notably, since inception, the firm has returned more than $24 billion to shareholders.

However, a declining crude utilization rate has hurt refining operations. Also, uncertainties in the global market, owing to more than a year-long trade dispute between the United States and China, are likely to hurt demand for petrochemicals and refined petroleum products, affecting the firm’s chemical and refining businesses.    

 (You can read the full research report on Phillips 66 here >>>).

Other noteworthy reports we are featuring today include Anheuser-Busch InBev (BUD), Electronic Arts (EA) and Square (SQ).

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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

AbbVie's (ABBV) Pipeline Solid, Key Launches in Near Term


Starbucks' (SBUX) Strong Global Footprint to Drive Growth


Midstream Business Aids Phillips 66 (PSX), Refining Hurts


Featured Reports

Baker Hughes (BHGE) to Gain From Calcasieu Pass LNG Contract

Per the Zacks analyst, Baker Hughes is well placed to capitalize on mounting LNG demand via the Calcasieu Pass Project contract.

Expanding Portfolio Drives Electronic Arts (EA) Prospects

Per the Zacks analyst, EA is expected to benefit from portfolio strength, growth in active player accounts and increased engagement amid rising competition.

Acquisition Benefits & Portfolio Strength Aid Square (SQ)

Per the Zacks analyst, Square's top line is being driven by robust Instant Deposits, Cash Card, Square Reader and Caviar.

Global Brands Strength Drive AB InBev's (BUD) Organic Sales

Per the Zacks analyst, strength in global brands led to AB InBev's organic sales growth in the second quarter.

Strategic Initiatives Aid PRA Group (PRAA), Expenses Hurt

Per the Zacks analyst, solid initiatives such as the buyout of eGov Systems and partnership with Internal Revenue Service should drive PRA Group's growth.

New Upgrades

Strong Markets, Acquisitions Aid Carpenter Technology (CRS)

Per the Zacks analyst, strong demand in most end markets, acquisitions and investing in targeted growth areas like additive manufacturing and soft magnetics will drive growth for Carpenter Technology.

Sunlight Buyout, Hawthorne Unit Aid Scotts Miracle-Gro (SMG)

Per the Zacks analyst, Scotts Miracle-Gro should gain from the synergies of the Sunlight Supply acquisition and strong growth prospects in its Hawthorne unit.

New Downgrades

Envestnet's Goodwill Laden Capital Structure Indicates Risk

Per the Zacks analyst, with goodwill constituting more than half of its total assets, Envestnet's capital structure puts investors at risk. Goodwill as an asset won't fetch any cash.

HealthEquity (HQY) Plagued by Costs Related to Data Breach

In recent times, HealthEquity had to incur huge costs resulting from a breach of personal patient data. The Zacks Analyst is apprehensive of the stiff competition in the medical services industry.


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Square, Inc. (SQ) : Free Stock Analysis Report
 
Starbucks Corporation (SBUX) : Free Stock Analysis Report
 
Phillips 66 (PSX) : Free Stock Analysis Report
 
Electronic Arts Inc. (EA) : Free Stock Analysis Report
 
Anheuser-Busch InBev SA/NV (BUD) : Free Stock Analysis Report
 
AbbVie Inc. (ABBV) : Free Stock Analysis Report
 
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