Friday, June 9, 2017
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 American Express (AXP), Las Vegas Sands (LVS) and Aetna (AET).These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
American Express shares have gained +23.6% over the last year, higher than the broader finance sector's gain of +20.2%. The Zacks analyst likes its solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments. Its strategic initiative focusing on platinum card portfolio and OptBlue program will drive business volume. It is also benefiting from cost reduction efforts, and return of significant amounts of capital to shareholders through dividend and share buyback programs. The stock has witnessed an upward revision in earnings estimate over the past 60 days. However, increase in provision for losses, a strong U.S. dollar, loss of Costco as a client and intense competition remain major near-term concerns.
Shares of Las Vegas Sands have gained +39.6% over the last one year, marginally higher than the gaming industry's increase of +38.6%. This strong performance reflects the company's exposure to the improving outlook for Macao where gaming revenues appear to have started growing again after struggling over the last few years. The addition of The Parisian Macao has further strengthened its Cotai Strip portfolio of properties. With stable operations beyond Macao (Vegas & Singapore) and limited capex needs going forward, the outlook for cash returns to shareholders through dividends (the stock yields an attractive 4.5% at present) and buybacks has notably brightened. The Zacks analyst points out in the updated research report published today that it will take some time for the region to return to its former glory as concerns related to the sustainability of revenues from the VIP market linger.
Aetna 's shares have outperformed the Zacks Medical HMO industry year to date (up +20.1% vs. +17.7%). Aetna expects long-term growth from its Government business. The Zacks analyst likes its cost-reduction initiatives and growing ACO collaborations which have paved the way for long-term growth. A strong balance sheet is another positive. The stock has also witnessed an upward revision in earning estimates over the past 60 days. However, Aetna's merger with Humana, which would have raised its rank in the industry, has been called off. Aetna has also been incurring losses in its public exchange business and has been exiting exchanges to avoid losses from this business. Furthermore, its membership growth remains under pressure. Increasing medical benefit ratios are also likely to hurt margins.
Other noteworthy reports we are featuring today include Yahoo (YHOO), Amphenol (APH) and Baker Hughes (BHI).
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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 Trends and Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Per the Zacks analyst, AvalonBay's rental revenue change for established communities slowed in May. While it would gain from solid portfolio and favorable demographics, supply rise is a major concern.
The Zacks analyst believes that KLA's comprehensive product line, strong cash generation capabilities and continued dividend hikes will increase investors' confidence in the stock.
Per the Zacks analyst, Amphenol is benefiting from improved end-market demand, new product rollouts and market share gains. However, high R&D costs and foreign exchange volatility remain headwinds.
The covering analyst believes that the merger of Baker Hughes with oil and gas business of GE will position it better to offset the impact of low crude prices.
The covering analyst likes the overall volume growth which is aiding the top line. Efforts to reward shareholders are also impressive.
According to the Zacks analyst, shareholder approval of the Yahoo-Verizon transaction is beneficial for investors.
Per the Zacks analyst, Mitsubishi UFJ depicts growth through global expansion and focus on Medium-term Business Plan (2015 to 2017).
The Zacks analyst believes that NCI Building will gain from its ongoing cost-saving initiatives and opportunities to expand IMP product lines. Robust backlog growth will also drive results.
The covering analyst believes that Maxim's core IC business, which is well-diversified and highly profitable, is driving overall results.
Per the Zacks analyst, Edwards Lifesciences is growing on its progress in THV segment with latest FDA nod for SAPIEN 3 valve which pulled up the share price. Its robust pipeline is also encouraging.
Per the Zacks analyst, Ensign Group suffers from rising cost, heavy debt, regulatory uncertainty from the pending repeal & replace of the ACA and stringent regulations faced by the non-U.S operations
Per the covering analyst, Brown-Forman's top and bottom lines continue to erode owing to currency headwinds and assets sale. However, the underlying net sales outlook for fiscal 2018 remains strong.
Per the Zacks analyst, with more than 30% sales generated outside, Hill-Rom faces hitch related to currency fluxes. Also, highly competitive Front Line Care and Patient Support markets are concerns.
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