Wednesday, October 10, 2018
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 Altria (MO), U.S. Bancorp (USB) and Biogen (BIIB). 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 >>>
Altria 's shares have outperformed the Zacks Tobacco industry over the past three months (+7.5% vs. -1.2%). The company has been delivering year-over-year bottom-line growth for quite some time and maintained the upside in second-quarter 2018.
The Zacks analyst thinks performance during the quarter was mainly backed by lower outstanding shares and reduced adjusted tax rate. In fact, solid performance in the first half of 2018 propelled management to raise 2018 view. Additionally, Altria has been progressing well with reduced risk products. Pricing also continues to drive the company's top line.
On the flip side, stern FDA regulations combined with increased health consciousness has been taking a toll on cigarette sales. Notably, cigarette shipment volumes fell 10.8% year over year during second quarter, wherein total cigarette retail share declined 50.2%. Sadly, volumes in this category are expected to remain soft in the forthcoming periods, owing industry-wide headwinds.
(You can read the full research report on Altria here >>> ).
Shares of Buy-ranked U.S. Bancorp have outperformed the Zacks Major Banks industry over the past three months, gaining +5.2% vs +2.4%. The company possesses an impressive earnings surprise history, beating expectations in three out of the trailing four quarters.
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.
However, escalating expenses due to its ongoing investments in technology remains a key concern. Also, involvement in legal hassles is likely to increase legal expenses and provisions in the near term. Nevertheless, U.S. Bancorp remains well poised to grow through acquisitions.
(You can read the full research report on U.S. Bancorp here >>> ).
Biogen 's shares have outperformed the Zacks Biomedical and Genetics industry year to date (+8.1% vs. -11.5%). Biogen has a strong position in the MS market with a wide range of products including Avonex, Tysabri, Tecfidera and Plegridy. The Zacks analyst likes its efforts to diversify beyond MS to other areas like Alzheimer's, Parkinson's and stroke, among others.
Meanwhile, its newest drug Spinraza has multi-billion dollar potential. Biogen's efforts to regularly in-license assets to build its pipeline are a major positive. It has many assets in its pipeline, which have transformative potential. Multiple data readouts are expected this year.
However, the launch of Ocrevus by Roche is beginning to have a negative impact on MS franchise sales in the United States. Spinraza's moderating trends in the U.S. is a concern. Meanwhile, estimates have gone down ahead of Q3 earnings results. The company has a mixed record of earnings surprises in recent quarters.
(You can read the full research report on Biogen here >>> ).
Other noteworthy reports we are featuring today include General Dynamics (GD), Ecolab (ECL) and HSBC Holdings (HSBC).
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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 Trendsand Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Smokeless Unit Aids Altria (MO), Low Cigarette Volumes Hurt
Loan Growth & Easing Margin Pressure Aids U.S. Bancorp (USB)
Biogen (BIIB) Rides on Spinraza, Diversifies Drug Portfolio
Strong Prospects in Global Industrial Unit Aids Ecolab (ECL)
The Zacks analyst is optimistic about Ecolab's Global Industrial segment. Europe, North America and Latin America have been driving Global Industrial's regional growth.
Expansion Efforts Aid HSBC Holdings (HSBC), High Costs a Woe
Per the Zacks analyst, while HSBC Holdings' efforts to grow market share in the U.K. and China increase its exposure in emerging markets, it might lead to higher costs, which will hurt bottom line.
Cost Reduction Aids Southern Copper (SCCO), Debt Woes Persist
The Zacks analyst appreciates Southern Copper's focus on cost reduction and expansion actions, particularly in Peru given its prospects for copper.
Omnicom (OMC) Rides on Organic Growth Amid Client Losses
Per the Zacks analyst, Omnicom continues to benefit from solid organic growth and enhanced digital and analytical capabilities. However, client losses weigh on its North American revenues.
Fee-based Revenue Continues to Aid Principal Financial (PFG)
Per the Zacks analyst, Principal Financial's focus on fee-based revenue sources will continue to help the company to deliver strong operational performance.
Declining Delinquency, Lower Paid Claims Aid Radian (RDN)
Per the Zacks analyst, Radian is poised to grow banking on declining delinquency, lower level of paid claims and solid persistency.
Lennar's (LEN) SG&A Leverage Improves, Gross Margin Soft
Per the Zacks analyst, Lennar remains strong owing to diverse revenue mix and improving SG&A leverage.
Vertex's (VRTX) New Cystic Fibrosis Drug Symdeko Impresses
Vertex Pharma's new cystic fibrosis drug, Symdeko, a tezacaftor/ivacaftor combo is off to a strong start. The Zacks analyst believes Symdeko will be a significant contributor to sales growth.
Merger Savings & Planned Investments Aid Evergy (EVRG)
Per the Zacks analyst Evergy's plans to invest $6.2 billion in the 2018-2022 period for strengthening its operations and merger savings will drive performance of the company.
Honda (HMC) to Gain From Vision 2030 Plan, Collaborations
Per the Zacks analyst, Honda is likely to gain from the Vision 2030 plan, which aims to cut costs and focus more on electric vehicles. Also, alliances to develop technology will expand its business.
Lam (LRCX) Impacted By PC Weakness & Memory Chips Oversupply
The Zacks analyst believes that Lam will continue to be impacted by weak PC demand. Also, oversupply and overcapacity of memory chips could impact Lam Research's growth in the near future.
Telefonica (TEF) Plagued by Unbundled Local Loop Regulation
Per the Zacks analyst, domestic competition remains a major hurdle for Telefonica as the unbundled local loop regulation is compelling it to make its network available to alternative providers.
Highly Regulated Environment Hurts General Dynamics (GD)
Per the Zacks analyst, General Dynamics operates in a highly regulated environment that remains subjected to audit by the U.S. government, which, in turn, may result in delayed payments.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportU.S. Bancorp (USB): Free Stock Analysis ReportAltria Group, Inc. (MO): Free Stock Analysis ReportHSBC Holdings plc (HSBC): Free Stock Analysis ReportGeneral Dynamics Corporation (GD): Free Stock Analysis ReportEcolab Inc. (ECL): Free Stock Analysis ReportBiogen Inc. (BIIB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research