Top Analyst Reports For Boston Scientific, Southern Company & BNY Mellon
Zacks Investment Research | Jan 10, 2019 10:52PM ET
Friday, January 11, 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 Boston Scientific (BSX), Southern Company (NYSE:SO) and BNY Mellon (BK). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Boston Scientific’s shares have outperformed the Zacks Medical Products industry over the past three months, losing -2.8% vs. -8.5%. The Zacks analyst thinks the company is suffering from significant cost escalation, which is weighing on its margins.
Also, a delay in LOTUS relaunch is hampering sales through 2018. Declining worldwide pacemaker sales is also hurting the CRM business. On a brighter note, the company is seeing growth across all business lines and geographies. Boston Scientific received a number of FDA approvals within the Cardiovascular group.
This apart, it launched LithoVue within Urology and rolled out the GUIDE XT in Europe. Three recent acquisitions- Claret Medical, VENITI and Augmenix, provide cause for optimism. These are expected to strongly contribute to the company’s inorganic growth profile. Boston Scientific’s significant progress related to its LOTUS valve relaunch is also encouraging. Also, post the suspension of LOTUS valve in Europe, ACURATE TAVR continues to build momentum.
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Shares of Southern Company have underperformed the Zacks Electric Power industry over the past six months, losing -3.4% vs +2.7%. The Zacks analyst emphasizes that the company is one of the largest electric utility holding companies in the United States and has managed to surpass estimates in each of the last seven quarters.
The company’s $12-billion AGL Resources (NYSE:GAS) buyout has significantly increased its customer base and diversified offerings. With good rate base growth and constructive regulation, it is expected to generate steady earnings and dividend growth in the coming years through long-term power contracts.
However, elevated leverage of the firm, along with continued timing and cost overrun issues over two of its major projects — Vogtle and Kemper — are major overhangs. While the company’s $25-billion Vogtle nuclear plant has already exceeded its budget and is years behind schedule, its Kemper project also suffered a setback with the suspension of all coal gasification operations amid additional cost burden. This is why Southern Company warrants a cautious stance from the investors.
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BNY Mellon’s shares have outperformed the Zacks Major Regional Banks industry in the past year (-18.8% vs. -19.1%). The company’s earnings surpassed expectations in only two of the trailing four quarters. Further, the earnings estimates have been going downward ahead of the company’s fourth quarter results.
The Zacks analyst thinks elevated operating expenses will likely continue to hamper bottom line growth to some extent. Also, the concentration risk, arising from significant dependence on fee-based income, remains a matter of concern.
However, higher interest rates, increase in fee income and improving assets balance will support profitability. Further, enhanced capital deployment plan reflects strong balance sheet position.
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Other noteworthy reports we are featuring today include Occidental Petroleum (OXY), Schlumberger (NYSE:SLB) and Southwest Airlines (NYSE:LUV).
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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
Today's Must Read/h6
Featured Reports/h6
Per the Zacks analyst, Parker-Hannifin's revamped "Win Strategy" along with the CLARCOR buyout should boost its growth prospects. However, business-realignment expenses are weighing on its results.
The Zacks analyst believes that strong bookings, capacity growth, higher passenger ticket as well as onboard and other revenues bode well for Royal Caribbean.
Per the Zacks analyst, strong demand for Class 8 trucks is driving PACCAR's revenues.
Per the Zacks analyst, the strong performance of lead drug Cabometyx for kidney cancer will boost Exelixis.
Per the Zacks analyst, MGIC Investment is poised for growth as improving housing market fundamentals drives higher premiums, better persistency, decline in claim payments and decreasing delinquencies.
The Zacks analyst believes that improving assets under management will continue to drive revenue growth for Cohen & Steers, while increase in operating expenses remains a near-term concern.
Per the Zacks analyst, Bed Bath & Beyond is benefitting from constant store openings and higher productivity of existing stores besides exclusive merchandise offerings.
Per the Zacks analyst, Parker-Hannifin's revamped "Win Strategy" along with the CLARCOR buyout should boost its growth prospects. However, business-realignment expenses are weighing on its results.
The Zacks analyst believes that strong bookings, capacity growth, higher passenger ticket as well as onboard and other revenues bode well for Royal Caribbean.
Per the Zacks analyst, strong demand for Class 8 trucks is driving PACCAR's revenues.
Per the Zacks analyst, the strong performance of lead drug Cabometyx for kidney cancer will boost Exelixis.
Per the Zacks analyst, MGIC Investment is poised for growth as improving housing market fundamentals drives higher premiums, better persistency, decline in claim payments and decreasing delinquencies.
The Zacks analyst believes that improving assets under management will continue to drive revenue growth for Cohen & Steers, while increase in operating expenses remains a near-term concern.
Per the Zacks analyst, Bed Bath & Beyond is benefitting from constant store openings and higher productivity of existing stores besides exclusive merchandise offerings.
New Upgrades/h6
Per the Zacks analyst, Evergy's $6.2 billion investment in the 2018-2022 period to strengthen operations and merger savings will boost its performance over the long term.
The Zacks analyst appreciates the company's efforts to modernize its fleet. Its focus on capacity discipline should cause improvement in yields. Efforts to reduce debt levels also raise optimism.
The Zacks analyst appreciates the company's efforts to modernize its fleet. Efforts to reward shareholders are also commendable.
Per the Zacks analyst, Evergy's $6.2 billion investment in the 2018-2022 period to strengthen operations and merger savings will boost its performance over the long term.
The Zacks analyst appreciates the company's efforts to modernize its fleet. Its focus on capacity discipline should cause improvement in yields. Efforts to reduce debt levels also raise optimism.
The Zacks analyst appreciates the company's efforts to modernize its fleet. Efforts to reward shareholders are also commendable.
New Downgrades/h6
Per the Zacks analyst, Occidental Petroleum faces the risks of cost overruns and development interruptions, coupled with stringent federal, state, local and foreign laws and regulations.
Per the Zacks analyst, increasing expenses are likely to hurt Bank OZK's bottom-line growth in the future. Pressure on margins despite improvement in interest rates remains a major concern.
The Zacks analyst agrees that the constraint in transportation capacities in the Permian Basin will dampen oil & gas productions and in turn will hurt demand for Schlumberger's oilfield services.
Per the Zacks analyst, Occidental Petroleum faces the risks of cost overruns and development interruptions, coupled with stringent federal, state, local and foreign laws and regulations.
Per the Zacks analyst, increasing expenses are likely to hurt Bank OZK's bottom-line growth in the future. Pressure on margins despite improvement in interest rates remains a major concern.
The Zacks analyst agrees that the constraint in transportation capacities in the Permian Basin will dampen oil & gas productions and in turn will hurt demand for Schlumberger's oilfield services.
Zacks Investment Research
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