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Q2 Scorecard & Research Reports for Gilead, American Tower & Others

Monday, August 6, 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 Gilead (GILD), American Tower (AMT) and Chubb (CB). 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 >>>

In addition to these stock research reports, we are also giving you a real-time scorecard of the ongoing Q2 earnings season. Including all of this morning's releases, we now have Q2 results from 410 S&P 500 members or 82% of the index's total membership.

Total earnings for these companies are up +24.9% from the same period last year on +10.1% higher revenues, with 80% beating EPS estimates and 73.9% beating revenue estimates. This is better performance than we have seen from the same group of 410 S&P 500 members in other recent periods.

For more details about the Q2 earnings season, check out our weekly Earnings Preview article - Should We Worry About the Downtrend in Earnings Estimates?

Strong Buy-ranked Gilead 's shares have outperformed the Zacks Biotech industry year to date, gaining +8.7% vs. a decline of -4.9%. Gilead's second-quarter results beat estimates on the strength of its HIV franchise. The Zacks analyst thinks the HIV franchise maintains momentum driven by the rapid adoption of Descovy -based regimens. The FDA approval of Biktarvy has further widened the portfolio. Biktarvy has also been approved in Europe which should boost sales further. The launch of Yescarta is progressing well in the United States and the CHMP gave a positive opinion on the same (tentative approval in the third quarter). Meanwhile, Gilead is intending to foray into the NASH market with selonsertib and filgotinib . Both the candidates are being evaluated in late stage studies and a tentative approval will diversify Gilead's portfolio. However, Gilead's HCV franchise is under pressure due to competitive and pricing pressure. The departure of the CEO at this crucial time further clouds the growth prospects of the company.

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

Shares of American Tower have outperformed the Zacks REIT and Equity Trust industry in the last three months (+9.3% vs. +6.1%). American Tower's second-quarter adjusted funds from operations (AFFO) surpassed expectations. The figure also compares favorably with the year-ago tally. Further, revenues for the quarter came in higher than the previous-quarter tally. The company also increased its outlook for 2018 property revenues. The Zacks analyst thinks American Tower continues to benefit from increased investment of wireless carriers in 4G LTE and 5G networks. Its tower buyouts in emerging markets and long-term tower leases with major wireless carriers lend it a competitive edge over rivals. Nonetheless, the company has a substantially leveraged balance sheet. Further, high customer concentration remains a risk. Particularly, the accelerated Indian carrier consolidation-driven churn has emerged as a near-term headwind for the company.

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

Chubb 's shares have lost -5.1% year to date, underperforming the Zacks Property, Casualty and Title industry, which has gained +1.9% over the same period. However, Chubb's second-quarter 2018 earnings beat expectations and also improved year over year on improved underwriting as well as investment results. The Zacks analyst thinks Chubb stands a good chance of leading the P&C space, benefiting from a suite of compelling products as well as services. The company's inorganic growth story is impressive, helping it achieve a higher long-term ROE. Increased scales, efficiencies and a solid balance sheet will lend Chubb a competitive edge. A strong capital position aids Chubb to boost shareholder value and invest in strategic initiatives to drive growth. The company is on track to achieve annual run-rate integration-related savings of $875 million by the end of 2018. Exposure to cat loss induces volatility in underwriting profitability. Escalating expenses too weigh on margin expansion

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

Other noteworthy reports we are featuring today include Aetna (AET), Northrop Grumman (NOC) and Humana (HUM).

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Sheraz Mian

Director of Research

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

Strong HIV Franchise and CAR T Therapy Fuel Gilead (GILD)

Tower Buyouts Drive American Tower (AMT), Debt Woes Linger

Higher Premiums Aid Chubb Limited (CB), Rising Costs Ail

Featured Reports

Medicare Business Aids Aetna (AET), Low Enrollment Hurts

Per the Zacks analyst, the company's Medicare business has meaningfully aided revenue growth and should continue to do so, but membership declines over the last two years is a concern.

Foreign Military Sales, Balance Sheet Aids Northrop (NOC)

Per the Zacks analyst, Northrop enjoys strong demand for various existing and new sets of programs in the International Market. Its strong balance sheet also offers substantial financial flexibility.

Strong Medicare Business, Acquisitions Aid Humana (HUM)

Per the Zacks analyst, acquisitions like Family Physicians Group and Your Home Advantage have boosted its top-line. Also, solid performance by Medicare Advantage business remains a driving factor.

Square (SQ) Banks on Strong Product Lines Amid Competition

Per the Zacks analyst, Square's products like Square Register, Build with Square and API platforms continue to aid growth in its gross payment volume.

Extensive Market Reach, Organic Growth Drive Eaton (ETN)

The Zacks analyst believes Eaton's presence in nearly 175 countries across globe and improvement in end market condition resulting in organic growth across segments, ensure strong performance.

Archer Daniels' (ADM) Readiness Program to Drive Growth

Per the Zacks analyst, Archer Daniels is on track with Readiness program that is building efficiency by reducing costs and transforming business with 1ADM plan.

Dividends & Buybacks Aid Southwest (LUV) Amid RASM Woes

The Zacks analyst likes the company's efforts to reward shareholders through dividends & buybacks.

New Upgrades

Higher Nitrogen Demand & Pricing Drive CF Industries (CF)

The Zacks analyst believes that CF Industries is well positioned to benefit from higher nitrogen demand in major markets in 2018. Higher nitrogen prices should also drive its sales and margins.

Commercial & International Business Drives Tetra Tech (TTEK)

Per the Zacks analyst, strong traction of Commercial & International Business group, fueled by robust infrastructure work in Canada, Australia, and South America should continue to drive sales.

Leasing, Occupier Outsourcing Lines to Aid CBRE Group (CBRE)

Per the Zacks analyst, CBRE Group will gain from improving occupier outsourcing business, leasing and strategic acquisitions. Also, digital and technology investments will give it a comparative edge.

New Downgrades

Weak Pressure Pumping Market to Hurt Patterson-UTI (PTEN)

The Zacks analyst is concerned over the weak market sentiment and lower utilization with respect to pressure pumping, which is expected to pressure Patterson-UTI's margins.

Starbucks (SBUX) Soft China Comparable Sales a Major Concern

Per the Zacks analysts, soft comparable sales in China are a major concern for the company. It now expects global comps to be marginally below its earlier guided range of 3-5%.

Amdocs (DOX) Hurt By Currency Volatility, Slowdown at AT&T

Per the Zacks analyst, Amdocs' high exposure to foreign currency exchange rate risk is an overhang on top-line. Moreover, decline in spending by AT&T, its largest client, is a major concern.

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Northrop Grumman Corporation (NOC): Free Stock Analysis Report

Humana Inc. (HUM): Free Stock Analysis Report

Gilead Sciences, Inc. (GILD): Free Stock Analysis Report

Chubb Limited (CB): Free Stock Analysis Report

American Tower Corporation (REIT) (AMT): Free Stock Analysis Report

Aetna Inc. (AET): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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