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Top Stock Reports for Disney, Coca-Cola & Gilead

Mark Vickery

Tuesday, May 21, 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 Disney (DIS), Coca-Cola (KO) and Gilead (GILD). 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 >>>

Disney’s shares have gained +28.7% over the past year, outperforming the Zacks Media Conglomerates industry’s gain of +23% during the same period. The Zacks analyst thinks Disney’s second-quarter fiscal 2019 top-line growth was driven by strong performance of DTCI and Parks, Experiences & Consumer Products segments. Higher guest spending and attendance and increase in consumer products business aided Parks segment revenues.

Additionally, Disney’s most-awaited movie, Avengers: Endgame, which recorded phenomenal box-office success, is expected to aid fiscal 2019 top line. However, second-quarter fiscal 2019 operating income decreased due to lower theatrical and home entertainment results and higher costs.

Increasing investments in ESPN and Disney+ and losses from streaming technology services hurt DTCI segment operating income. Moreover, due to the ongoing investments, Disney anticipates DTCI operating loss to be higher in third-quarter fiscal 2019.

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

Shares of Coca-Cola have increased +15.6% in the past year, outperforming the Zacks Soft Drinks Beverages industry which has gained +7.2% over the same period. The Zacks analyst thinks this is largely attributable to the effective execution of strategies to evolve as a consumer-centric total beverage company. This bolstered the company’s quarterly performances as evident from a robust surprise trend.

First-quarter 2019 marked its seventh positive earnings surprise in the last eight quarters and seventh straight sales beat. Top and bottom lines benefited from ongoing productivity efforts and disciplined growth strategies along with robust performance across all segments.

Further, innovation and investment in core categories and brands have been the key focus area for Coca-Cola, which has led to the expansion of retail value share. Its transformative global re-franchising initiatives are expected to boost margins. However, the company expects adverse currency rates to significantly hurt comparable revenues and operating income in the second quarter and 2019.

(You can read the full research report on Coca-Cola here >>>).

Buy-ranked Gilead’s shares have outperformed the Zacks Biotech industry year to date, gaining +5.3% vs. an increase of +0.3%. Although the sales miss was disappointing, Gilead’s earnings beat the consensus mark in the first quarter. Soft HCV franchise sales stabilized as compared to the levels in prior quarters.

The Zacks analyst thinks Gilead’s HIV franchise maintains momentum on continued uptake of Genvoya and Odefsey, and the rapid adoption of Biktarvy. Meanwhile, it shifted focus to the HIV franchise, and newer avenues like CAR-T therapy and NASH. Gilead’s collaboration with Novo Nordisk for NASH treatments is a step in the right direction, given its recent debacles.

The company suffered a setback with the failure of a late-stage study on selonsertib in patients with compensated cirrhosis (F4) due to NASH. It is also developing a pipeline targeting inflammatory diseases. Data from phase III studies on filgotinib were also encouraging. A potential filing is planned by the end of this year.

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

Other noteworthy reports we are featuring today include CME Group (CME), Concho Resources (CXO) and Entergy (ETR).

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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

Robust Parks & Resorts, Studio Strength Drive Disney (DIS)

Investment & Innovation Reflect Coca-Cola's (KO) Core Strength

Strong HIV Franchise, CAR-T, Stable HCV Boost Gilead (GILD)

Featured Reports

Concho (CXO) Rides on RSP Permian Buyout, High Capex a Worry

The acquisition of RSP Permian has boosted Concho's scale and production prospects. However, high 2019 capex forecast of $2.9 billion may impact overall cash flows, per the Zacks analyst.

Project Investments Aid Entergy (ETR), High Debt Levels Hurt

Per the Zacks analyst, Entergy's disciplined investments in growth projects bolsters its prospects. However, massive debt levels can be a major headwind for the company going ahead.

Production from U.S. Resource Plays Boost Marathon (MRO)

Marathon Oil expects oil production from U.S. resource plays to rise 12% in 2019. However, the Zacks analyst is worried over the lack of clarity on dividend increase.

Favorable Budget, Solid Cash Flow Aid Leidos Holdings (LDOS)

Per the Zacks analyst, favorable U.S. budgetary amendments are boosting Ledios Holdings' growth.

Aqua America (WTR) to Gain from Acquisitions & Investments

Per the Zacks analyst, 64 acquisitions in the last five years and $1.4 billion investment in the 2019-2021 time frame to strengthen infrastructure will drive Aqua America's performance.

Wix.com (WIX) User Base Grows Wider, Spending on the Rise

According to the Zacks analyst, Wix is benefiting from product innovations and collaborations, favoring premium subscriber growth.

AGCO (AGCO) Rides on Strategic Investments, Improving Demand

The Zacks analyst expects AGCO to gain from improving global farm equipment demand and focus on strategic investments to expand product lines and improving factory productivity.

New Upgrades

Ubiquiti (UBNT) Buoyed by Strong Enterprise Technology Unit

Per the Zacks analyst, growth in global Enterprise Technology business driven by increasing market traction of UniFi products, including switches & security gateways, should drive Ubiquiti's top line.

New Strategic Acquisitions, Organic Growth Aid Bruker (BRKR)

The Zacks analyst is optimistic about buyouts of Hain, Mestrelab and Alicona Imaging which have started to contribute to the top line strongly. Series of product launches are driving organic growth.

Sturdy Global OAS Sales Lift Cardiovascular Systems (CSII)

The Zacks analyst is hopeful about Cardiovascular Systems gaining strong momentum internationally, banking on the commercial launch of orbital atherectomy system (OAS) in several geographies.

New Downgrades

Increasing Expenses Weigh On CME Group's (CME) Margins

Per the Zacks analyst, the company's expenses have been increasing for the past many years due to investment in technology and benefit expenses and are weighing on its margins.

Soaring Costs & Lower Vehicle Production Hurt Magna (MGA)

Per the Zacks analyst, elevated program launch costs and higher engineering spending to develop technology is impeding Magna's profit. Also, declining light vehicle production in key markets is a woe.

HRB Block (HRB) Grapples With Higher Expenses, Litigations

The Zacks analyst is worried about H&R Block's rising expenses due to heavy investments in technology and operations. The company also faces litigation related to its various operating activities.

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Coca-Cola Company (The) (KO) : Free Stock Analysis Report
Gilead Sciences, Inc. (GILD) : Free Stock Analysis Report
Entergy Corporation (ETR) : Free Stock Analysis Report
The Walt Disney Company (DIS) : Free Stock Analysis Report
Concho Resources Inc. (CXO) : Free Stock Analysis Report
CME Group Inc. (CME) : Free Stock Analysis Report
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