Top Analyst Reports For Broadcom, Canadian National & CVS Health
Zacks Investment Research | Feb 13, 2018 05:51AM ET
Tuesday, February 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 Broadcom (NASDAQ:AVGO), Canadian National (CNI) and CVS Health (NYSE:CVS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Buy-rated Broadcom’s shares have handily beaten the technology sector as well as the red-hot semiconductor space over the last one year, gaining +19%. Broadcom 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.
Broadcom has recently inked financing agreements with various institutions to fund Qualcomm’s proposed takeover. If completed, then this deal will make it the third-largest chipmaker, behind Intel (NASDAQ:INTC) and Samsung (KS:005930). The company also has strong ties with leading OEMs across multiple target markets that will help it to gain key insights into the requirements of customers.
Moreover, the upcoming launch of the next generation WiFi products is expected to be a growth driver for the segment. However, customer concentration, intensifying competition, integration risks due to frequent acquisitions and leverage balance sheet are key headwinds.
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Shares of Canadian National have gained +7.4% over the last one year, but failed to outperform the Zacks Rail industry which gained +12.9% over the same period. Also, the company has underperformed Canadian Pacific Railway’s shares that have gained 17.6% in the same time period.
Adding to its woes, Canadian National reported lower-than-expected earnings per share and revenues in the fourth quarter of 2017. Deterioration in operating ratio owing to high labor and fuel costs also raise concerns. However, the volume growth witnessed in the quarter raises optimism.
The year-over-year increase in revenues and earnings per share bodes well for the stock as well. Moreover, the Zacks analyst is impressed by the 10% dividend hike announced by the company in January 2018.
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CVS Health’s shares have been trading above the Zacks Drug Stores industry over the last year losing -11.2% vs. a decline of -16.7%. CVS Health ended the year 2017 on a solid note with a better-than-expected fourth-quarter performance.
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The year-over-year growth in the top line was driven by a strong Pharmacy Services segment, benefiting from the upside in the specialty services. CVS Health’s strong 2018 PBM selling season is another upside. The Zacks analyst is also looking forward to an upbeat 2019 selling season.
Also, CVS Health’s plan to acquire Aetna (NYSE:AET) might change the Healthcare landscape in the United States. On the flip side, the company has been suffering from softness in Retail/LTC business and a weak margin scenario. However, year-over-year Retail/LTC comparisons were still unimpressive. A weak margin scenario continues to put pressure on the bottom line.
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Other noteworthy reports we are featuring today include Aflac (AFL), Marathon Petroleum (MPC) and DXC Technology (DXC).
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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
Today's Must Read/h6
Featured Reports/h6
The Zacks analyst views Hershey's cost cutting initiatives and productivity investments as effective hedges against a weak top-line performance.
The Zacks analyst believes that Marathon Petroleum's decision to drop down assets worth $8.1 billion to its midstream partnership MPLX will boost its cash flows, fueling buybacks and higher dividends.
Per the Zacks analyst, Aflac U.S. segment continues to perform strongly and have led to top line growth.
The covering analyst believes Fifth Third's growth has been aided by diversified revenue sources, easing margin pressure and rising deposit balances.
Per the Zacks analyst, Seagate's recent NAND-supply deal with Toshiba will help it in developing advanced HDD, SSD and hybrid solutions.
Per the Zacks analyst Nasdaq is set to grow as it accelerates growth via organic means and prudent acquisitions.
Per the Zacks analyst, merger synergies, partnerships with AT&T (NYSE:T) and HCL and acquisitions of the likes of Tribridge and Logicalis SMC are fueling DXC Technology's growth.
The Zacks analyst views Hershey's cost cutting initiatives and productivity investments as effective hedges against a weak top-line performance.
The Zacks analyst believes that Marathon Petroleum's decision to drop down assets worth $8.1 billion to its midstream partnership MPLX will boost its cash flows, fueling buybacks and higher dividends.
Per the Zacks analyst, Aflac U.S. segment continues to perform strongly and have led to top line growth.
The covering analyst believes Fifth Third's growth has been aided by diversified revenue sources, easing margin pressure and rising deposit balances.
Per the Zacks analyst, Seagate's recent NAND-supply deal with Toshiba will help it in developing advanced HDD, SSD and hybrid solutions.
Per the Zacks analyst Nasdaq is set to grow as it accelerates growth via organic means and prudent acquisitions.
Per the Zacks analyst, merger synergies, partnerships with AT&T (NYSE:T) and HCL and acquisitions of the likes of Tribridge and Logicalis SMC are fueling DXC Technology's growth.
New Upgrades/h6
Per the Zacks analyst, Columbia Sportswear is set to gain from Project CONNECT. This aims at enhancing revenues and marketing processes, capturing cost of sales efficiencies, and lowering SG&A costs.
The Zacks analyst is impressed by the company's performance on the international front. Efforts to revive its fortunes under CEO Bob Bakish are also impressive.
Per the Zacks analyst, Fiserv benefits from its expanding customer base, strong product portfolio and higher recurring revenues.
Per the Zacks analyst, Columbia Sportswear is set to gain from Project CONNECT. This aims at enhancing revenues and marketing processes, capturing cost of sales efficiencies, and lowering SG&A costs.
The Zacks analyst is impressed by the company's performance on the international front. Efforts to revive its fortunes under CEO Bob Bakish are also impressive.
Per the Zacks analyst, Fiserv benefits from its expanding customer base, strong product portfolio and higher recurring revenues.
New Downgrades/h6
Per the Zacks analyst, the revamped market dynamics following Brexit are expected to affect firms like Domtar that has significant presence in the U.K., lowering its productivity.
Per the Zacks analyst, elevated supply of residential units in Mid-America Apartment's key markets is expected to moderate rent growth and affect occupancy levels of its properties.
The Zacks analyst believes volatile power prices in spot market and lower than expected rate revision for regulated utilities could adversely impact American Electric's margins and revenues
Per the Zacks analyst, the revamped market dynamics following Brexit are expected to affect firms like Domtar that has significant presence in the U.K., lowering its productivity.
Per the Zacks analyst, elevated supply of residential units in Mid-America Apartment's key markets is expected to moderate rent growth and affect occupancy levels of its properties.
The Zacks analyst believes volatile power prices in spot market and lower than expected rate revision for regulated utilities could adversely impact American Electric's margins and revenues
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