Friday, January 6 2016
Today's Research Daily features new research reports on 16 major stocks, including Gilead Sciences (GILD), Pepsi (PEP) and United Parcel Services (UPS).
Gilead Sciences have been laggards lately, on persistent fears about drug pricing and other regulatory issues that haven't eased up even after the November election. The stock has lost -21% of its value over the last one year vs. the -17.4% decline for the Zacks Biotech industry in that same time period. Gilead's HCV franchise continues to witness slowdown in the U.S. and Europe due to lower sales of Harvoni. These challenges notwithstanding, but the analyst also points towards the company's robust late-stage pipeline. The company's HIV franchise has been performing well, thanks to the newly launched TAF-based products Genvoya, Descovy and Odefsey. (You can read the full research report on Gilead Sciences here >> )
Pepsi shares lagged the broader market last year (+7.3% for PEP vs. +16.1% for the S&P 500), but they outperformed the Zacks Soft Drinks Beverages industry as well as Coke (KO was +0.3%). The analyst emphasizes that Pepsi has been doing well on the back of continued momentum in the Frito-Lay business, revenue management strategies, improved productivity and better market execution. Moreover, Pepsi has been seeing higher volumes and profits in the North American region due to an improving economy, better industry pricing dynamics and a consistency in positive innovation. Pepsi reports Q4 results on February 9th. (You can read the full research report on Pepsi here >> )
UPS shares have been strong performers lately, up +24.4% in the past year. But the stock has lagged the Zacks Air Freight Industry (up +29.7%) as well as rival FedEx (up +40%). FedEx's Q4 report broadly offered favorable read-throughs for UPS's December-quarter results (it reports on January 31st), particularly with respect to volume trends over the holidays. The company's dominant ground operation positions it to be a beneficiary, along with FedEx, of the ongoing secular shift towards e-commerce. The company's strong cash flows and track record of returning excess cash to shareholders through dividends and buybacks is another positive. (You can read the full research report on United Parcel Services here >> )
Other noteworthy reports we are featuring today include Shell (RDS.A), Twitter ( TWTR ) and Stanley Black & Decker (SWK).
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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 TrendsandEarnings Previewreports. If you want an email notification each time Sheraz publishes a new article, pleaseclick here >>>
Today's Must Read
The Zacks analyst thinks Western Union's strategic investments in products & technology should boost its market position. However, pressure on money remittance and stiff competition remain concerns.
The covering analyst thinks Brown & Brown's strategic acquisitions help it spread its operations apart from driving growth.
The Zacks analyst thinks Twitter's user friendly changes to the platform, live streaming deals and cost cutting efforts are in the right direction.
The Zacks analyst thinks Cummins will benefit from aggressive share repurchases & increasing dividend payouts.
Stanley Black & Decker has agreed to acquire Sears Holdings' Craftsman brand, which complements its existing brands and will create new opportunities, especially in the lawn and garden end markets.
As per the covering analyst, Enterprise Product Partner's fee-based transportation and storage assets insulate it from commodity price weakness, while helping to increase distributions consistently.
The Zacks analyst believes Arthur J Gallagher remains focused on tapping opportunities in the U.K., Australia, New Zealand, Canada and the U.S. via prudent acquisitions.
Menu innovation, focus on increasing speed of service, effective marketing strategy and remodeling program for brand transformation are likely to boost the company's growth significantly.
The Zacks analyst thinks Hologic's recent progress with Aptima Assay is a part of the effort to capture the vast Diagnostics market. The company's focus on international expansion is another upside.
The covering analyst believes that Everest Re will continue to experience premium growth on the back of prudent initiatives, while maintaining a disciplined capital management strategy.
Lofty capital spending, slow progress on its asset disposal plan and exposure to the violence-prone regions in Nigeria has made the Zacks analyst turn bearish on Royal Dutch Shell.
The Zacks analyst believes that although the Quorvo-ubisys collaboration over an open source IoTivity framework is a positive, higher R&D costs and technological obsolescence may shrink margins.
Weak performance by certain segments and brands, macroeconomic woes, forex headwinds, and the shift to alternative modes of entertainment has been marring Mattel's top line, per the covering analyst.