Friday, October 26, 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 McDonald's (MCD), Thermo Fisher (TMO) and Caterpillar (CAT). 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 >>>
Buy-ranked McDonald's shares have gained +10.8% over the past six months, outperforming the Zacks Restaurants industry which has gained +3.7% over the same period. The Zacks analyst likes McDonald's impressive earnings surprise history, various sales and digital initiatives as well as positive comparable sales.
Earnings surpassed estimates for the 17th straight quarter as it reported third-quarter 2018 results. Furthermore, increased focus on delivery and accelerated deployment of Experience of the Future restaurants in the United States should boost its performance.
These apart, the company's efforts to drive growth in International Lead & High Growth Markets bode well. In fact, global comps at McDonald's have been positive over the trailing 13 quarters. Yet, high labor costs and currency headwinds remain major concerns.
Moreover, revenues have been under pressure for quite some time due to strategic refranchising initiatives. Even its heightened focus on refranchising should cut the capital requirements and facilitate EPS growth.
(You can read the full research report on McDonald's here >>> ).
Shares of Buy-ranked Thermo Fisher have outperformed the Zacks Medical Instruments industry over the past three months (-0.4% vs. -4.9%). Thermo Fisher ended the third quarter on a promising note with both earnings and revenues surpassing the consensus mark.
The company saw strength in all end markets categorized by customer type or geography. It particularly registered solid international performance with strong growth in Asia-Pacific including China. Also, a series of product launches with progress in precision medicine initiatives aided its performance.
T he Zacks analyst thinks the company's recently-closed acquisition of Advanced Bioprocessing business from BD should add complementary cell culture products to Thermo Fisher's bioproduction offerings. Also, the company's initiative to buy Gatan to boost electron microscopy suite buoys optimism.
On the flip side, Thermo Fisher's business segments are getting impacted by unfavorable business mix. Also, competitive headwinds and escalating costs pose a threat.
(You can read the full research report on Thermo Fisher here >>> ).
Caterpillar 's shares have outperformed the Zacks Construction and Mining industry over the past year, losing -16.1% vs. -16.8%. Caterpillar's third-quarter adjusted earnings per share (EPS) rose 47%, while revenues improved 18% from the year-ago tallies.
Both the top and bottom line came ahead of respective expectations. This was driven by strength in its end markets and cost control efforts. Backed by strong order rates, favorable commodity prices, increasing backlog, Caterpillar guides adjusted earnings per share to be $11.00-$12.00 for 2018, reflecting year-over-year growth of 67% at the mid-point.
The Zacks analyst thinks improved end-user demand across all regions and most end markets is likely to aid its top line. Cost cutting efforts and additional investments in expanded offerings and services, and digital initiatives like e-commerce will also drive growth. However, material cost inflation due to the impact of tariffs and increased transportation costs will affect its near-term margins.
(You can read the full research report on Caterpillar here >>> ).
Other noteworthy reports we are featuring today include Biogen (BIIB), CSX Corporation (CSX) and Celgene (CELG).
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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
McDonald's (MCD) Gains From Re-Franchising & Robust Comps
End-Market Strength, Global Business Aid Thermo Fisher (TMO)
Strong Global Demand to Drive Caterpillar (CAT), Costs Hurt
Biogen (BIIB) Rides on Spinraza and In-Licensing Agreements
Biogen's newest drug Spinraza is performing well and has multi-billion dollar potential.The Zacks analyst likes Biogen's efforts to in-license assets some of which have transformative potential.
Cost Cuts, Dividends & Buybacks Aid CSX Corporation (CSX)
The Zacks analyst likes the company's efforts to reduce costs. Efforts to reward shareholders through dividends and buybacks are also impressive.
Revlimid, Otezla Boost Celgene (CELG) Amid Pipeline Setbacks
Per the Zacks analyst, psoriasis drug Otezla and strong sales of lead drug Revlimid boost Celgene's performance. However, pipeline setbacks and dependence on Revlimid is a cause of concern.
Acquisition Strategy to Aid Northrop (NOC), Costs to Hurt
Per the Zacks analyst, acquisition of Orbital ATK will drive the performance of Northrop Grumman. However, higher operating costs are headwinds.
Dividends & Buybacks Aid Canadian National (CNI), Costs Ail
The Zacks analyst is impressed by the company's efforts to reward shareholders. However, deterioration in operating ratio, due to high labor and fuel costs, is concerning.
Acquisitions, Strong Balance Sheet Aid Total System (TSS)
Per the Zacks analyst, buyout of NetSpend, TransFirst, Cayan, iMobile and others are a major positive.
Surface Segment Aids TechnipFMC (FTI) Amid Subsea Weakness
Higher activities from the North American markets are benefiting TechnipFMC's Surface segment.
Juniper (JNPR) Rides on Enterprise Business and Partnerships
Per the Zacks analyst, rising demand for Juniper's enterprise routing portfolio like MX204 and MX10003 along with strategic partnership with Nutanix and Ericsson remain tailwinds for future growth.
Xilinx (XLNX) Rides on Product Strength, End-Market Growth
Per the Zacks analyst, Xilinx is benefiting from higher advanced products sales across all end markets, particularly Communications, Data Center & TME, and Automotive and Broadcast.
End-Market Strength, Expanding Portfolio Aids Amphenol (APH)
Per the Zacks analyst, Amphenol's top-line benefits from improved end-market demand, new product rollouts, and market share gains.
Carter's (CRI) Soft Wholesale Unit to Hurt Sales in 2018
Per the Zacks analyst, weakness in the U.S. Wholesale segment due to the bankruptcy of Toys "R" Us is hurting the company's overall sales.
Exposure to Cat Events Weigh on Selective Insurance (SIGI)
Per the Zacks analyst, Selective Insurance's exposure to catastrophic events poses an inherent risk to the P&C business, thus rendering volatility to underwriting profitability and earnings.
Toys "R" Us Liquidation Hurts Hasbro's (HAS) Sales & Profits
Per the Zacks analyst, the Toys "R" Us liquidation effect is expected to continue to hurt Hasbro's sales and margins in the near term. Also, soft demand is likely to add to the woes.
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 reportThermo Fisher Scientific Inc. (TMO): Free Stock Analysis ReportMcDonald's Corporation (MCD): Free Stock Analysis ReportCSX Corporation (CSX): Free Stock Analysis ReportCelgene Corporation (CELG): Free Stock Analysis ReportCaterpillar Inc. (CAT): Free Stock Analysis ReportBiogen Inc. (BIIB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research