Wednesday, February 28, 2018
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Gilead (GILD), BNY Mellon (BK) and State Street (STT). 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 >>>
Gilead’s shares have outperformed the Zacks Biotech industry in the last six months, increasing +6.1% vs. a decline of -4.6%. Gilead topped both earnings and revenue estimates in the fourth quarter.
The HIV franchise maintains momentum driven by the rapid adoption of TAF-based regimens in the United States and EU. The TAF-based regimens now represent 62% of total HIV prescription volume following the launch of Genvoya, Odefsey and Descovy in 2016.
The Zacks analyst thinks that the approval of Gilead’s latest triple HIV therapy is likely to provide an impetus to the stock as Gilead is now banking on its HIV franchise and newer avenues like the CAR-T therapy. However, the HCV franchise is under tremendous pressure due to lower patient starts and increasing competition.
Both pricing and market share are expected to stabilize by mid-2018 while patient starts are expected to decline further. The company’s guidance for 2018 also lacks luster.
(You can read the full research report on Gilead here >>>).
Shares of BNY Mellon have underperformed the Zacks Major Regional Banks industry in the last six months (+11.3% vs. +21.6%). The company’s earnings surpassed expectations in only two of the trailing four quarters. Concentration risk arising from significant dependence on fee-based income remains a matter of concern for the company.
If there are any changes in individual investment preferences, regulatory amendments or a slowdown in capital market activities, it could hurt the company’s financials. However, The Zacks analyst thinks easing margin pressure (driven by gradual higher interest rates) and rising loan demand will drive revenue growth. Also, potential lesser regulations, lower tax rates and cost-saving initiatives are likely to drive profitability.
(You can read the full research report on BNY Mellon here >>>).
State Street’s shares have underperformed the Zacks Major Regional Banks industry in the last six months (+16.5% vs. +21.6%). The company has an impressive earnings surprise history, having surpassed expectations in each of the trailing four quarters.
The Zacks analyst likes its new business wins, synergies from GE Asset Management deal and rising interest rates, all of which are likely to continue supporting profitability. Further, the company’s cost saving efforts through multi-year restructuring plan is expected to a success.
However, continuous decline in trading services revenues is a concern. Also, mounting expenses remain a major near-term concern for the company.
(You can read the full research report on State Street here >>>).
Other noteworthy reports we are featuring today include LKQ Corporation (LKQ), Alliant Energy (LNT) and Dillard's (DDS).
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Mark Vickery
Senior Editor
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 Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Featured Reports
Alliant Energy (LNT) Gains From Investment, Renewable Focus
The Zacks analyst believes Alliant Energy will benefit from its planned $5 billion investment to strengthen infrastructure and generate more electricity from clean sources.
McDermott's (MDR) Chicago Bridge Buy to Boost Onshore Focus
While the $6 billion Chicago Bridge buyout will add onshore services to McDermott's offshore-focused portfolio, the Zacks analyst is worried about the increase in the combined company's debt load.
Acquisition & Branch Openings to Drive LKQ Corporation (LKQ)
Per the Zacks analyst, frequent acquisitions in the United States & Europe and opening of new Euro Car Parts branches are adding to LKQ Corp's sales growth.
Rising Demand to Aid Mosaic (MOS), High Debt Level a Concern
While Mosaic is well placed to gain from increasing global demand for phosphate and potash in FY18, its elevated debt level is a concern, per the Zacks analyst.
Dillard's (DDS) to Gain from Strong Customer Base
Per the Zacks analyst, Dillard's is poised to gain from focus on increasing productivity, and developing an omni-channel platform, which should strengthen customer base.
New Upgrades
Cost Cuts, Strong Demand to Aid Century Aluminum (CENX)
Per the Zacks analyst, Century Aluminum should gain from its actions to reduce operating costs and strong demand for aluminum across automotive and aerospace end-use markets.
Upbeat Grain Group & Cost Savings to Aid Andersons (ANDE)
The Zacks analyst expects Andersons' Grain Group will benefit from solid storage income. Further, its progress in attaining cost savings goal of $20 million in 2018 will drive growth.
New Downgrades
Soft Sales Remain a Headwind for Big 5 Sporting (BGFV)
Per the Zacks analyst, Big 5 Sporting's sales continued a dismal trend for the third straight quarter due to a tough retail environment and soft demand for firearms. This is likely to hurt comps.
Falling Revenues and Rising Costs Hurt Community Health (CYH)
Per the Zacks analyst, continuous decline in top line due to falling admissions and rising expenses on the back of impairment losses affect Community Health's bottom line adversely.
State Street Corporation (NYSE:STT): Free Stock Analysis Report
Alliant Energy Corporation (LNT): Free Stock Analysis Report
LKQ Corporation (LKQ): Free Stock Analysis Report
Gilead Sciences, Inc. (NASDAQ:GILD): Free Stock Analysis Report
Dillard's, Inc. (DDS): Free Stock Analysis Report
Bank Of New York Mellon Corporation (The) (BK): Free Stock Analysis Report
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Zacks Investment Research