Thursday, March 22, 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 Amgen (AMGN), FedEx (FDX) and Thermo Fisher (TMO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amgen’s shares have gained +9.4% over the past year, outperforming the Zacks Biomedical and Genetics industry, which has declined -3.3% over the same period. Amgen’s newer drugs – Prolia, Xgeva, Kyprolis – are performing well. Amgen is also progressing with its pipeline and expects approval and launch of migraine candidate, Aimovig this year.
Amgen’s restructuring plan is making it leaner and more cost efficient. Lower taxes and share buybacks should provide some bottom-line support in 2018. However, Amgen has some challenges in store, given slowdown in sales of mature drugs like Enbrel, Aranesp and Neulasta, which are facing an array of branded and generic competitors.
Volume growth of new drugs may not be enough to offset the lost sales due to the decline in mature brands. While Neupogen is already facing U.S. biosimilar competition, Neulasta, Epogen and Sensipar could start facing the same this year. Meanwhile, uptake of key new drug, Repatha has been slow due to payer restrictions.
Shares of Buy-rated FedEx have outperformed the Zacks Air Freight and Cargo industry and rival United Parcel Service in the last year. The company has gained +31.6% while the industry it belongs to and UPS have rallied +13% and +1.9%, respectively, in the same period.
Ushering in further good news, FedEx outperformed in the third quarter of fiscal 2018 driven by increased package volumes and higher base rates. The company's Ground unit performed very impressively in the quarter.
The Zacks analyst thinks strong e-commerce growth is a huge positive for the company. The new tax law is also encouraging. It was primarily responsible for the company's bullish earnings outlook for fiscal 2018.
Efforts to reward its shareholders through dividend payments and share buybacks are also noteworthy. An uptick in such shareholder-friendly activities cannot be ruled out, in the light of the savings induced by the Tax Cuts and Jobs Act. High costs are, however, hurting the bottom line.
Buy-rated Thermo Fisher’s shares have outperformed the Zacks Medical Instruments industry over the last three months (+11.9% vs. +9.8%). Post a promising fourth-quarter show by Thermo Fisher, the Zacks analyst is encouraged by the company’s solid international performance with strong growth in the Asia-Pacific and the emerging markets.
Also, a series of product launches along with major progress in precision medicine initiatives benefited the company’s performance. Thermo Fisher’s FEI acquisition has already started to boost analytical instruments portfolio. Also in 2017, the company deployed $ 7.8 billion on strategic acquisitions, adding leading biopharma contract development and manufacturing services through Patheon.
On the flip side, in the reported quarter, the company’s business segments were impacted by strategic investments and unfavorable business mix. Also, competitive headwinds and rising operating costs continue to pose a threat.
Other noteworthy reports we are featuring today include Ecolab (ECL), Sherwin-Williams (SHW) and Ameriprise Financial (AMP).
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Today’s Must Read
Per the Zacks analyst, Jack in the Box’s focus on menu innovation and operational excellence is likely to drive sales amid a difficult operating environment.
The Zacks analyst thinks higher demand for chief brands will boost Hormel’s near-term results.
The Zacks analyst likes Concho Resources for its strategic acreage position in the Permian Basin where it holds drilling locations with 8 billion barrels of resource potential.
While Sherwin-Williams should gain from synergies of the Valspar acquisition, hefty costs related to the buyout will weigh on its FY18 earnings, per the Zacks analyst.
The Zacks analyst thinks that Xylem is countering oil & gas market challenges with improving analytics business as well as water infrastructure services.
Per the Zacks analyst, strong fundamentals of the life-science industry have driven demand for Alexandria’s properties.
Ecolab has been gaining prominence in MedTech, thanks to Global-Industrial unit growth in Europe.
Per the Zacks analyst, Pentair will gain from the separation of Water and Electrical businesses. Rising margins of residential and commercial business will aid results.
Per the Zacks analyst, Ameriprise is well poised for bottom-line growth given its restructuring efforts with focus on core business. Also, a well-diversified portfolio will continue to aid revenues.
According to the Zacks analyst, Plexus benefits from new program wins as well as continuing global expansion.
Reducing average dayrates of jackup rigs continues to hurt Rowan, according to the Zacks analyst. A plunge in free operating cash flow is also a cause for concern.
Per the Zacks analyst compliance with strict regulations and relicensing needs could further increase the rising operating expenses of IDACORP and hurt its margins.
Per the Zacks analyst, used car margin pressure, as well as costs associated with huge investments aimed to strengthen the used vehicle, parts and components, are hurting Group 1 Automotive.
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Thermo Fisher Scientific Inc. (TMO): Free Stock Analysis Report
The Sherwin-Williams Company (SHW): Free Stock Analysis Report
FedEx Corporation (FDX): Free Stock Analysis Report
Ecolab Inc. (ECL): Free Stock Analysis Report
Ameriprise Financial, Inc. (AMP): Free Stock Analysis Report
Amgen Inc. (AMGN): Free Stock Analysis Report
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