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The Zacks Analyst Blog Highlights: AbbVie, Union Pacific, CSX, Danaher and ONEOK

Zacks Equity Research

For Immediate Release

Chicago, IL – September 19, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: AbbVie ABBV, Union Pacific UNP, CSX CSX, Danaher DHR and ONEOK OKE.

Here are highlights from Wednesday’s Analyst Blog:

Top Analyst Reports for AbbVie, Union Pacific and CSX

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 AbbVie, Union Pacific and CSX. 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 underperformed the Zacks Large-Cap Pharmaceuticals industry over the past three months (-7.8% vs. -5.5%). The Zacks analyst thinks that AbbVie’s key drug, Humira, is performing well based on strong demand trends despite new competition. Imbruvica has multibillion-dollar potential.

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

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 in 2019.

Shares of Union Pacific have gained 3.9% in the past six months, outperforming the Zacks Rail industry’s rise of 3.5%. The Zacks analyst is impressed with Union Pacific's initiatives to reward its shareholders. Since November 2017, the company has raised its quarterly dividend payout five times.

It is also active on the buyback front. Initiatives to control costs in a bid to drive the bottom line are also impressive. The company’s operating ratio has been improving mainly due to its cost-cut plans. The metric is expected to improve further going forward. However, sluggish freight volumes (down 3% in first-half 2019) represent a major headwind.

Anticipating the dull scenario to persist, Union Pacific trimmed its volume growth outlook for the second half of the year. Its high debt levels are an added concern. In addition, the massive capex might play spoilsport.

CSX’s shares have gained 14.6% year to date, underperforming the Zacks Rail industry’s rise of 21.2% over the same period. The Zacks analyst believes that this was primarily due to sluggish intermodal revenues.

Dismal performance of the intermodal segment is affecting the company's growth prospects. Segmental revenues declined in the first half of 2019 due to lower volumes. In fact, this coupled with factors like weak domestic coal demand and sluggish crude-by-rail volumes forced the company to trim its current-year top-line forecast.

However, we are impressed by the company's efforts to control costs. CSX's operating ratio has improved in the first half of the year, courtesy of its cost-reduction efforts. The company's initiatives to reward its shareholders are encouraging as well. During the first half of 2019, the company returned $2 billion to shareholders through a combination of dividends and share buybacks.

Other noteworthy reports we are featuring today include Danaher and ONEOK.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.

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CSX Corporation (CSX) : Free Stock Analysis Report
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ONEOK, Inc. (OKE) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
Danaher Corporation (DHR) : Free Stock Analysis Report
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