Top Research Reports For Citigroup, Qualcomm And Aetna
Zacks Investment Research | Nov 02, 2017 03:51AM ET
Thursday, November 2, 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 Citigroup (C), Qualcomm (QCOM) and Aetna (AET). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Citigroup shares have outperformed the Zacks Major Banks industry over the last one year, gaining +53.6% vs +40%. This price performance is backed by impressive earnings surprise history. The company has surpassed expectations for earnings in all the trailing four quarters. Third-quarter 2017 results reflected lower expenses and higher revenues. However, weak fixed income market revenues and elevated costs of credit were undermining factors.
The Zacks analyst thinks the company’s restructuring and streamlining efforts, strategic investments in core business and expense management will likely support profitability going forward. Moreover, expansion of wealth management business in Australia will act as a tailwind. Yet several issues, including litigation burden, create apprehension. Also, in spite of rising rates, margins are under pressure, due to persistent decline in the company’s legacy holdings portfolio.
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Shares of Qualcomm have gained +4.4% over the last three months vs. the -4% decline for the Zacks Wireless Equipment industry. Qualcomm posted strong fourth-quarter 2017 financial results with the shipment of 220 million CDMA-based MSM chipsets. The company achieved a 5G data connection with the Snapdragon X50 5G modem chipset on 28GHz mmWave spectrum. Qualcomm is teaming up with Verizon and Novatel Wireless for 5G NR mmWave technology trial. This marks Qualcomm’s leadership in 5G, chipset market and mobile connectivity.
Further, it is extending cash tender offer for its pending NXP Semiconductor deal. Qualcomm has launched Mesh Networking Platform and is planning to buy Scyfer B.V. to boost its Artificial Intelligence Research. However, the company continues to receive charges for unfair business practices and licensing royalty payments. Aggressive competition in the mobile phone chipset market remains a woe.
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Aetna’s shares outperformed the Zacks Health Maintenance Organization industry year to date, increasing +39.4% vs. a gain of +34.4%. Aetna’s third-quarter earnings surpassed the expectations and grew year over year, driven by strong underwriting margin performance, disciplined pricing, a focus on high quality care management, and a decline in medical cost.
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The Zacks analyst expects the company to witness long-term growth from its Government business and International expansion. Its cost-reduction initiatives will aid margins. The sale of its Group Life and Disability business will help it to focus on core growth areas.
Following strong third-quarter results, Aetna raised its earnings guidance, cementing investors' confidence in it. Aetna has, however, been incurring losses in its public exchange business and has been exiting exchanges. Furthermore, its membership growth remains under pressure. Increasing medical benefit ratios are also likely to hurt margins.
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Other noteworthy reports we are featuring today Honda (HMC), Ecolab (ECL) and Electronic Arts (EA).
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Sheraz Mian
Director of Research
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, strong investments to boost its energy infrastructure will primarily drive Public Service Enterprise.
Per the Zacks analyst, Unum Group is poised for growth on the back of improving premiums driven by solid persistency levels and sturdy volume of sales.
The Zacks analyst appreciates the overall volume growth which is aiding the top line.
Per the Zacks analyst, Honda's Vision 2030 strategy will enable it to focus on electric and self-driving vehicles.
The Zacks analyst is bullish on Ecolab's Global Institutional unit, thanks to growth in the Specialty & Healthcare business.
Per the Zacks analyst, increasing digital sales especially from live services along with the strength of its franchises will continue to boost EA's top line.
Per the Zacks analyst, Fiserv is benefiting from the increasing adoption of DNA, Zelle and other digital banking solutions among the banks and credit unions.
Per the Zacks analyst, strong investments to boost its energy infrastructure will primarily drive Public Service Enterprise.
Per the Zacks analyst, Unum Group is poised for growth on the back of improving premiums driven by solid persistency levels and sturdy volume of sales.
The Zacks analyst appreciates the overall volume growth which is aiding the top line.
Per the Zacks analyst, Honda's Vision 2030 strategy will enable it to focus on electric and self-driving vehicles.
The Zacks analyst is bullish on Ecolab's Global Institutional unit, thanks to growth in the Specialty & Healthcare business.
Per the Zacks analyst, increasing digital sales especially from live services along with the strength of its franchises will continue to boost EA's top line.
Per the Zacks analyst, Fiserv is benefiting from the increasing adoption of DNA, Zelle and other digital banking solutions among the banks and credit unions.
New Upgrades/h6
The Zacks analyst is bullish on Masimo's SET Pulse Oximetry business to drive growth over the long run.
The covering analyst believes that Newfield's strong focus on crude shale plays in the Anadarko Basin will drive oil production.
Per the Zacks analyst, WellCare Health's consistent revenue growth has been significantly backed by the increasing level of premiums.
The Zacks analyst is bullish on Masimo's SET Pulse Oximetry business to drive growth over the long run.
The covering analyst believes that Newfield's strong focus on crude shale plays in the Anadarko Basin will drive oil production.
Per the Zacks analyst, WellCare Health's consistent revenue growth has been significantly backed by the increasing level of premiums.
New Downgrades/h6
The Zacks analyst is concerned about capacity expansion outpacing traffic growth at Southwest. High labor and fuel costs are also likely to limit bottom-line growth.
The Zacks analyst thinks that reduced demand for reserve power products and escalating prices of major inputs such as lead would continue to dent EnerSys' results in the upcoming quarters.
Per the Zacks analyst, Avery Dennison (NYSE:AVY)'s margins in the near term will bear the brunt of rising raw material costs and higher interest levels as result of the Yongle and Finesse acquisitions.
The Zacks analyst is concerned about capacity expansion outpacing traffic growth at Southwest. High labor and fuel costs are also likely to limit bottom-line growth.
The Zacks analyst thinks that reduced demand for reserve power products and escalating prices of major inputs such as lead would continue to dent EnerSys' results in the upcoming quarters.
Per the Zacks analyst, Avery Dennison (NYSE:AVY)'s margins in the near term will bear the brunt of rising raw material costs and higher interest levels as result of the Yongle and Finesse acquisitions.
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