Wednesday, August 9, 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 CVS Health (CVS), Marriott (MAR) and Enbridge (ENB). 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 >>>
CVS Health shares have outperformed the Zacks categorized Drug Stores industry year to date losing -0.4% vs. -4.4%. CVS Health posted better-than-expected second-quarter 2017 with both adjusted EPS and revenues beating expectations. Year-over-year top line growth was driven by a strong Pharmacy Services segment, benefiting from the upside in the Specialty Pharmacy.
The company’s strong PBM selling season is a major positive. However, poor year-over-year Retail/LTC numbers along with margin debacle resulted in a dull earnings performance by the company in the quarter. Despite an unimpressive bottom-line scenario the company has raised the lower-end of its earnings outlook for 2017 raising investors optimism. The Zacks analyst thinks the Omnicare and Target Pharmacy buyouts should drive enterprise value significantly in the days ahead.
(You can read the full research report on CVS Health here >>>).
Shares of Marriott have outperformed the Zacks Hotels industry in the year-to-date period (the stock is up +25.7% vs. +3.3% gain for the industry). Marriott’s second-quarter 2017 earnings beat expectations and increased year over year. Notably, with the purchase of Starwood, Marriott became the world's largest hotel company. In fact, the acquisition is likely to result in a bigger brand with increased scale and a robust development pipeline in the long run.
The Zacks analyst likes Marriott’s rising North-American business, sizeable international exposure and attractive brand-position. Further, its investments in technology for hotel bookings will improve guest experience, which in turn should boost occupancy. Yet lingering political uncertainties in key international markets, oversupply in some regions and currency headwinds might continue to limit revenue growth. Integration risks linked to Starwood purchase is an added concern.
(You can read the full research report on Marriott here >>>).
Enbridge’s shares have declined -1.9% over the last one year, significantly underperforming the Zacks Oil & Gas Production industry’s gain of +5.7% during the aforesaid period. The company has the longest and most sophisticated crude and liquids pipeline system in the world that spreads over 17,511 miles.
The Zacks analyst likes the merger with Spectra Energy as it has made Enbridge the largest energy infrastructure company in North America in terms of enterprise value. Also, the transaction has given Enbridge the industry’s largest backlog of growth projects, worth around C$75 billion. The company believes that this huge backlog will help it to grow its dividend by 10–12% annually from 2018 to 2024.
However, the company’s substantial debt load is a matter of concern. Also, during second-quarter 2017, Enbridge reported lower-than-expected results owing to higher operating expenses and accelerated maintenance work at the upstream operations of customers.
(You can read the full research report on Enbridge here >>>).
Other noteworthy reports we are featuring today include MetLife (MET), Deutsche Bank (DB) and Aon (AON).
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Today's Must Read
CVS Health (CVS) Rides on Strong PBM Growth amid Retail Woes
Buyout & Expansion Drive Marriott (MAR), Revenue Woes Stay
Enbridge's (ENB) C$75B Project Backlog to Offset Debt Load
Take Two's (TTWO) Rising Digital Revenues to Drive Growth
Per the Zacks analyst, Take Two's growth will be driven by increasing digital revenues, Social Point buyout and strength in its franchises like Grand Theft Auto.
Ralph Lauren (RL) Continues to Gain from Way Forward Plan
Per the Zacks analyst, Ralph Lauren's first quarter was backed by cost-savings, and lower markdowns and promotions. This reflects the company's focus on Way Forward Plan that remains a growth driver.
Emergent's (EBS) BARDA Deal Bodes Well for BioThrax Growth
Per the Zacks analyst, Emergent's deals with BARDA for its key product BioThrax bodes well for growth. Moreover, the company's follow-on contract with CDC may further boost the performance of the drug.
Aon's (AON) Solid Cash Flow Boosts Investments, Debt Woes Ail
Per the Zacks analyst, although sufficient generation of cash flow paves the way for Aon's organic and inorganic growth oriented investments, its rising level of debt is worrying.
Henry Schein's (HSIC) Cost Pressure Deepens on XRAY Pact
The Zacks analyst is concerned about the rising operating expenses of Henry Schein which are further getting intensified with the recent distribution deals with DENTSPLY SIRONA (XRAY).
Cost Control Supports Deutsche Bank (DB), Legal Costs a Woe
The Zacks analyst remains optimistic about Deutsche Bank's cost control efforts, several strategic initiatives and strong capital position.
Robust Product Portfolio Steers Arista's (ANET) Growth Engine
Per the Zacks analyst, Arista is benefiting from the robust product portfolio, which is helping it to win customers.
Alexandria (ARE) to Ride High on Strong Rent and Occupancy
Per the Zacks analyst, Alexandria Real Estate Equities is set to ride high, backed by solid growth in rental rate and sound leasing activities. Occupancy will also be high amid robust demand.
Solid Market Adoption of NexSys PCS Buoys Haemonetics (HAE)
The Zacks analyst is bullish on solid market adoption of Haemonetics' FDA-approved NexSys PCS plasmapheresis system. The company's reaffirmed guidance for fiscal 2018 instills investor confidence.
FormFactor (FORM) Rides on Cascade Microtech Acquisition
The Zacks analyst notes that the acquisition of Cascade Microtech is strengthening FormFactor's end market foothold, contributing significantly to the company's top line.
Avon's (AVP) Soft Active Representatives Remain a Deterrent
Per the Zacks analyst, Avon's second-quarter results were marred by decline in Active Representatives across all segments. Active Representatives is likely to be flat or up 1% in the second half.
Declining Revenues, Spin off Charges Weigh on MetLife (MET)
The Zacks analyst is concerned with declining revenues from the past more than two years. Spin off charges related to BrightHouse Financial will dent MetLife's margins in the coming quarters.
Store Closures & Bankruptcy to Hit Taubman Centers (TCO)
Per the Zacks analyst, Taubman Centers' performance in the near term will be marred by the shrinking footfall amid shift toward online channels, store closures and bankruptcy of retailers.
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MetLife, Inc. (MET) : Free Stock Analysis Report
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