Top Analyst Reports for PepsiCo, Eli Lilly & Broadcom

Friday, July 13, 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 PepsiCo (PEP), Eli Lilly (LLY) and Broadcom (AVGO). 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 >>>

PepsiCo’s shares have decreased 7% year to date, underperforming the Zacks Soft Beverages industry, which has declined -5.1% over the same period. However, PepsiCo has surpassed the industry in the past month driven by a solid earnings trend with beat recorded in the last 10 quarters, including second-quarter 2018.

Strong performances in its international division, backed by higher revenue growth in developing and emerging markets have been aiding results. Further, the company has reported positive sales surprise in six of the last eight quarters.

The Zacks analyst thinks the company is also gaining from significant strength in the snacks business, which has mostly offset the sluggishness in beverage category. The company’s product innovations to include healthier food assortments and non-carbonated drinks in its portfolio should boost sales. However, consumers’ awareness on health and wellness, alongside new taxes on sugar-sweetened beverages and growing regulatory pressures are affecting CSD sales.

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

Shares of Eli Lilly have outperformed the Zacks Large-Cap Pharmaceuticals industry year to date (+5.3% vs. -0.8%). The Zacks analyst thinks Lilly’s new products like Trulicity, Taltz, Basaglar, Cyramza, Jardiance and Lartruvo have been driving revenues and the trend is expected to continue in 2018. Lilly expects to launch 20 new products by 2023, including at least two new indications/line extensions on an average every year.

The decision to sell or spin-off the Animal Health segment, which has underperformed lately, is a prudent one, in our view. However, competitive pressure on Lilly’s drugs is expected to rise this year.

Challenges remain for the company in the form of upcoming loss of patent exclusivity for products like Cialis and the impact of generic competition for Strattera, Effient and Axiron. U.S. pricing access pressure will also remain a headwind in 2018. Estimates have remained stable ahead of the Q2 earnings release. Lilly has a positive record of earnings surprises in recent quarters.

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

Broadcom’s shares have underperformed the Zacks Electronics – Semiconductors industry over the past year, losing -16.1% vs. -8.3%. Broadcom is a premier designer, developer and global supplier of a broad range of semiconductor devices.

The Zacks analyst thinks the company is benefiting from strong demand of its wireless solutions and expanding product portfolio, which makes it well-positioned to address the needs of rapidly growing technologies like IoT and 5G. Strong ties with leading OEMs across multiple target markets will help the company to gain key insights into the requirements of customers.

The company faces intensifying competition and integration risks due to frequent acquisitions. Broadcom’s leveraged balance sheet and customer concentration continue to be headwinds.

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

Other noteworthy reports we are featuring today include Biogen (BIIB), 3M (MMM) and Marathon Petroleum (MPC).

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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>>>

Featured Reports

Biogen (BIIB) Diversifies Portfolio, Competition Heats Up

The Zacks analyst likes Biogen’s efforts to diversify beyond its core area of multiple sclerosis (MS) to others like Alzheimer’s.

Intercity Buyout, Rising Baby Boomers to Aid Amedisys (AMED)

The Zacks analyst is bullish on Amedisys’ expanding customer base through strategic buyouts like Intercity. Aging U.S. population and home health as a cheaper care modality are other growth drivers.

Business Streamlining Aids Community Health (CYH)

Per the Zacks analyst numerous divestitures in recent years have led to business expansion into core growth areas and debt reduction that has strengthened its financial position.

Infra Upgrade, Firm Financials Aid Edison International (EIX)

Per the Zacks analyst, infrastructural development programs along with operational expansion will boost company’s top line.

Returns-Focused Growth Plan Bodes Well for KB Home (KBH)

With the Returns-Focused Growth plan and solid housing fundamental in place, KB Home’s revenues and operating margin are expected to significantly improve in 2018, per the Zacks analyst.

Debt-free Position Aids T. Rowe Price (TROW), High Cost a Woe

Per the Zacks analyst, debt free position with substantial liquidity has assisted in strengthening T. Rowe Price’s capital leverage.

Freight Demand Aids Knight-Swift (KNX) Amid Driver Crisis

The Zacks analyst likes the company’s solid freight demand allowing it to quote high rates for its cargo.

New Upgrades

Marathon Petroleum (MPC) to Grow on Andeavor Acquisition

The Zacks analyst believes that Marathon Petroleum’s Andeavor acquisition will integrate the premier assets of both the companies, bolstering the scale and leadership position of the combined entity.

Fastenal (FAST) Strong on Vending Machines & Onsite Locations

Fastenal’s investment to boost Onsite locations, vending machines count and ecommerce business is expected to boost sales, per the Zacks analyst.

Leadership Brands to Drive Helen of Troy’s (HELE) Top Line

Per the Zacks analyst, product launches, marketing efforts and e-commerce plans for Leadership Brands should keep driving Helen of Troy’s sales. Leadership Brands formed 79% of sales in first quarter.

New Downgrades

Cost Inflation, Business Separation Risk Hurt Pentair (PNR)

Per the Zacks analyst, higher material and other costs will dent Pentair’s margins in fiscal 2018. Risks pertaining to the separation of the Electrical business add to the concerns.

3M (MMM) Marred by Input Price Inflation & High Pension Cost

Per the Zacks analyst, price inflation in major inputs, high retirement benefit cost and escalating freight charges might continue to hurt 3M’s profitability in the near term.

Investment Portfolio Risk, High Costs Hurt ProAssurance (PRA)

Per the Zacks analyst, declining investment income has been affecting the company’s topline. Increasing expenses due to policy buyouts, underwriting and operating expenses weigh on margins.

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Pepsico, Inc. (PEP): Free Stock Analysis Report
 
Marathon Petroleum Corporation (MPC): Free Stock Analysis Report
 
3M Company (MMM): Free Stock Analysis Report
 
Eli Lilly and Company (LLY): Free Stock Analysis Report
 
Biogen Inc. (BIIB): Free Stock Analysis Report
 
Broadcom Limited (AVGO): Free Stock Analysis Report
 
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