Monday, August 28, 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 AbbVie (ABBV), Broadcom (NASDAQ:AVGO) (AVGO) and 21st Century Fox (FOXA). 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 >>>
AbbVie’s shares have gained +15.7% year to date, outperforming the Zacks Large Cap Pharmaceuticals industry, which has gained +10.8% over the same period. AbbVie reported better-than-expected Q2 results, beating estimates for both earnings and sales. Humira and Imbruvica kept up the strong performance, while Viekira continued to be hurt by intensifying competition.
The Zacks analyst likes Humira’s performance and thinks sales should continue to be driven by strong demand trends. Imbruvica also has a multibillion dollar potential while AbbVie is exploring the possibility of label expansion into solid tumors and autoimmune diseases. AbbVie has a promising pipeline with several pivotal data readouts and regulatory milestones due in the second half.
However, though Humira is doing well, the company is concerned about the product’s long-term growth prospects, given potential biosimilar competition. Viekira also faces intense pricing and competitive pressure in the HCV market.
(You can read the full research report on AbbVie here >>>).
Shares of Broadcom have handily beaten the technology sector as well as the red-hot semiconductor space in the year-to-date period, gaining +38.9%. The Zacks analyst thinks this outperformance is attributable to consistent results. Broadcom reported impressive third-quarter fiscal 2017 results.
The company now expects fourth-quarter revenue growth to be in the double-digit range on a year-over-year basis, much similar to the second and third quarter. However, gross margin is expected to contract slightly due to unfavorable product mix (higher mix of low margin wireless business). Customer concentration and leveraged balance sheet are other concerns for investors.
(You can read the full research report on Broadcom here >>>).
21st Century Fox’s shares have increased +10.2% over the last year, widely outperforming the Zacks Film and Television industry, which has gained +4.8% over the same period. This outperformance is primarily attributable to five straight quarters of earnings beats.
The company posted impressive earnings results in the final quarter of 2017. Cable Network Programming, which has been a driving force backed by rising affiliate fees, is expected to do well in fiscal 2018 as well. However, management anticipates costs at this division to go up in fiscal 2018.
Meanwhile, the company’s proposed acquisition of the remaining 61% stake in Sky plc has hit a roadblock after the deal was 'minded' by the U.K. government for a second phase of reviews.
(You can read the full research report on 21st Century Fox here >>>).
Other noteworthy reports we are featuring today include Intuit (INTU), Fidelity National Information Services (FIS) and China Life Insurance (LFC).
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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
Annaly (NLY) Banks on MBS Investments to Bolster Growth
Per the Zacks analyst, Annaly enjoys portfolio growth by allocating capital to premium investments which complement its agency MBS. However, the company is vulnerable to global market fluctuations.
Higher Fees Aid Willis Towers' (WLTW) Revenues, Costs Ail
Per the Zacks analyst, higher commissions and fees will continue to boost revenues for Willis Towers, thereby accelerating the company's overall growth.
Fidelity (FIS) to Gain from Digitization, High Debt Hurts
Per Zacks analyst, Fidelity remains well positioned to benefit from investment in mobile banking and innovative products such as PayNet and BuyWay.
Statoil (OL:STL) (STO) Banks on Norway Upstream Projects, Debts High
The Zacks analyst expects Statoil to generate significant cash flow from new upstream projects in Norway. However, significant debt load is a concern.
Xcel Energy (NYSE:XEL) Gains from Investment, Lowers Emission
The Zacks analyst believes Xcel Energy continues to gain from its strategic investments to strengthen its operations.
Dr Pepper Snapple (DPS) Strong on RCI & Marketing Programs
The covering analyst stresses that Rapid Continuous Improvement (RCI) program drives revenues and productivity across Dr Pepper's business while heavy marketing investment creates brand awareness.
China Life (LFC) Grows on Premiums, Rising Expenses Bother
Per the Zacks analyst, although China Life's top line continues to strengthen on consistent rise in premium income and solid investment management, its bottom line is hurt by escalating expenses.
New Upgrades
Higher Subscriptions, Product Refreshes Drives Intuit (INTU)
Per the Zacks analyst, Intuit's prospect looks bright as frequent product refreshes is helping it to gain customers. Moreover, higher subscriptions will drive more stable revenues going ahead.
Dollar Tree's (NASDAQ:DLTR) Sturdy Comps Run to Propel Top-Line
Per the Zacks analyst, Dollar Tree's strategies helped it ahiceve 38th straight quarter of comps growth in the second quarter. Further, third quarter comps are likely to rise in low-single digits.
Solid End Markets, Buyouts to Benefit TE Connectivity (TEL)
Per the Zacks analyst, robust harsh environment applications sales will continue to drive the company's margins. Also, the recent Creganna & Intercontec buyouts bode well for its Industrial segment.
New Downgrades
Harris Corporation (NYSE:HRS) Stung by High Costs and Debt Woes
The Zacks analyst is concerned about the high debt levels in addition to the integration and restructuring costs. The below-par performance of the Space and Intelligence Systems unit is also worrying.
Integer Holdings (ITGR) Hurt by Soft Margins on Lower Rates
The Zacks analyst is bearish about Integer Holdings' distressed margins due to falling reimbursement rates and higher provisions for rental revenue adjustments.
Customer-Facing Labor Hours Cost to Hit Lowe's (LOW) Margins
Per the Zacks analyst, lower-than-expected second-quarter results and investment plans compelled Lowe's to trim earnings view. Lowe's investment in customer-facing hours in stores will hurt margins.
China Life Insurance Company Limited (LFC): Free Stock Analysis Report
Intuit Inc. (NASDAQ:INTU): Free Stock Analysis Report
Twenty-First Century Fox, Inc. (FOXA): Free Stock Analysis Report
Fidelity National Information Services, Inc. (FIS): Free Stock Analysis Report
Broadcom Limited (AVGO): Free Stock Analysis Report
AbbVie Inc. (NYSE:ABBV): Free Stock Analysis Report
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Zacks Investment Research