Tuesday, February 12, 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), Eli Lilly (LLY) and U.S. Bancorp (USB). 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 5.1% over the past year, outperforming the Zacks Media Conglomerates industry’s gain of 2.6% during the same period. Disney’s first-quarter fiscal 2019 results benefited from strong performance of Media Networks and Parks, Experiences & Consumer Products segments.
An increase in affiliate revenues and higher program sales at Cable Networks’ and Broadcasting boosted Media revenues. Parks revenues benefited from increase in guest spending and average daily room rates at domestic parks. The Zacks analyst thinks Disney’s content slate will likely get a significant boost following the completion of Fox transaction.
Notably, the combined entity received 37 nominations at this year’s Golden Globes. However, higher programming costs at ESPN and heavy investments in streaming services continue to hurt profitability. Softness experienced in Chinese tourism negatively impacted Shanghai Disney Resort results.
(You can read the full research report on Disney here >>>).
Shares of Eli Lily have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year, +54.9% vs. +6.2%. Lilly missed Q4 earnings estimates while beating the same for sales. However, Lilly lowered its guidance for 2019.
The Zacks analyst thinks revenue growth in 2019 will likely be driven by higher demand for newer drugs including Trulicity, Jardiance, Taltz, Verzenio as well as new migraine drug, Emgality as some older drugs like Cialis face generic competition. In 2018, Lilly made significant pipeline progress with several positive late-stage data readouts, multiple approvals and regulatory submissions.
Lilly also added promising new pipeline assets through business development deals. However, competitive pressure on Lilly’s drugs is expected to rise in 2019. Generic competition for several drugs including Cialis, rising pricing pressure, currency headwinds and the impact of the failed Lartruvo study are expected to put pressure on the top line.
(You can read the full research report on Eli Lily here >>>).
U.S. Bancorp’s shares have outperformed the Zacks Major Banks industry over the past six months, losing -3.5% vs -10.5%. The company possesses an impressive earnings surprise history, beating expectations in all the trailing four quarters. Fourth-quarter 2018 results reflected higher revenues, aided by elevated fee income. However, reduced mortgage banking revenues and high expenses were on the downside.
The Zacks analyst thinks U.S. Bancorp's prospects will likely get support from its solid business model, core franchise, lower tax rate, rising interest rate and diverse revenue streams. Also, its organic growth remains solid and will likely benefit from the improving economic scenario.
U.S. Bancorp remains well poised to grow through acquisitions. However, escalating expenses due to its ongoing investments in technology and likely increase in legal expenses remain concerns.
(You can read the full research report on U.S. Bancorp here >>>).
Other noteworthy reports we are featuring today include Boston Scientific (BSX), Prudential (PRU) and Alexion (ALXN).
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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, Media Strength Drives Disney (DIS)
New Drugs to Drive Lilly's (LLY) Sales Amid Generic Pressure
Loan Growth Supports U.S. Bancorp (USB), Cost Woes Linger
BTG Buy to Aid Boston Scientific (BSX), Cost Pressure Stays
The Zacks analyst is hopeful about Boston Scientific's impending $4.2-billion buy of BTG which is expected to augment its Peripheral Interventions (PI) arm. Cost escalation remains a constant hurdle.
Prudential (PRU) Gains From Pension Risk Transfer Business
Per the Zacks analyst, Prudentail's penetration and leadership in the pension risk transfer business, financial wellness gaining traction poise well the company. However, increase in expenses concern.
Soliris Fuels Alexion (ALXN) But Overdependence A Concern
Per the Zacks analyst, Alexion's Soliris continues to boost sales as the company works to expand the drug's label. However, Alexion is highly dependent on Soliris as Ultomiris is in infancy stages.
Production Boost from Startups, Cost Savings Aid TOTAL (TOT)
Per the Zacks analyst TOTAL's rising production from new upstream startups and cost savings initiatives are boosting margins and profitability of the company.
Declining User Base, Stiff Competition Hurts Twitter (TWTR)
Per the Zacks analyst, declining user growth rate amid increasing competition for ad dollars from the likes of Facebook and Google doesn't bode well for Twitter.
EHR Platforms Aid Cerner (CERN), Licensed Software Sluggish
Cerner will benefit from its EHR (Electronic Health Record) & EMR (Electronic Medical Record) platforms.
North Star Initiatives Aid Fifth Third (FITB), High Cost Ails
Per the Zacks analyst, Fifth Third's strategic initiatives will support revenues, cut costs and optimize balance sheet position.
Higher Premiums Continued to Aid Cincinnati Financial (CINF)
Per the Zacks analyst, consistent improvement in premiums will continue to boost revenues for Cincinnati Financial, thereby resulting in the company's overall growth.
HCM Adoption & Product Rollouts Aids Ultimate Software (ULTI)
Per the Zacks analyst, Ultimate Software's revenue growth continues to be driven by high demand for its human capital management (HCM) solutions. Also, its diversified product portfolio is a positive.
Mettler-Toledo (MTD) Benefits From Acquisition Contributions
Per the Zacks analyst, Mettler-Toledo is riding on Biotix acquisition which is driving growth in its biggest contributing laboratory segment as well as aiding its performance in Americas.
Hilton's (HLT) Soft Leisure Demand in U.A.E Region a Woe
Per the Zacks analysts, soft leisure demand in U.A.E might impact Hilton's RevPAR in the Middle East and Africa. Also, lower government spending and increased hotel supply in the region are worrisome
High Brand Investment Costs to Hurt Kellogg's (K) Profits
Per the Zacks analyst, Kellogg's fourth-quarter profit was hurt by high brand investment costs among others. Kellogg expects to continue such investments, which is likely to dent profits in 2019.
Business Model Transition, Higher Costs Hurt Teradata (TDC)
Per the Zacks analyst, Teradata is being negatively impacted by the business model transition from perpetual to subscription-based revenues coupled with increasing expenses.
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U.S. Bancorp (USB) : Free Stock Analysis Report
Prudential Financial, Inc. (PRU) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
The Walt Disney Company (DIS) : Free Stock Analysis Report
Boston Scientific Corporation (BSX) : Free Stock Analysis Report
Alexion Pharmaceuticals, Inc. (ALXN) : Free Stock Analysis Report
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