Top Research Reports For Facebook, UnitedHealth & Pfizer
Zacks Investment Research | Apr 03, 2018 03:27AM ET
Tuesday, April 3, 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 Facebook (NASDAQ:FB), UnitedHealth (UNH) and Pfizer (PFE). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Facebook shares have underperformed the S&P 500 index in the last three months, losing -15.7% vs. -5.3%. Facebook has been battered by the recent data leak, which reportedly affected 50 million users. The fiasco has sparked concerns about user privacy on the platform. The incident not only grabbed the attention of government regulators worldwide but also fetched harsh criticism from the likes of Apple (NASDAQ:AAPL) CEO Tim Cook.
Although CEO Mark Zuckerberg has apologized, it may not be enough to restore user as well as advertiser trust immediately. But the Zacks analyst thinks Facebook’s efforts to plug security loopholes as well as limit fake news will eventually boost trustworthiness.
The company’s focus on building strong “community” can hurt engagement over the next few quarters, the steps are prudent enough to expand user base over the long run. Meanwhile, estimates have been stable ahead of the company’s Q1 earnings release. Facebook has positive record of earnings surprises in recent quarters.
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Shares of Buy-rated UnitedHealth have underperformed the Zacks Medical Insurance industry over the last six months (up +8.4% vs. +8.8%). The Zacks analyst likes the company’s robust Government business and continued strong growth at Optum, which are driving long-term growth. Its international business and strong capital position that allows for business investment are the other positives. It has been witnessing an increase in membership from past many years.
The company raised its 2018 earnings guidance led by tax reform upside. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised upward over the last 90 days. Nevertheless, membership loss in its fee based commercial business and Brazilian business will pull down the overall membership growth.
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Buy-rated Pfizer’s shares have outperformed the peer group over the last three months (the stock is down -4.7% over this period vs. a -7.1% decline for the Zacks Large-Cap Pharmaceuticals industry). Pfizer continues to face headwinds in the form of genericization of key drugs, supply challenges in the legacy Hospira portfolio, pricing pressure and rising competition, which are hurting the top line.
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However, the Zacks analyst thinks new products like Ibrance, contribution from acquisitions, cost cuts and share buybacks should help the company achieve its guidance. Pfizer also boasts a strong pipeline and expects approximately 25 to 30 drug approvals over the next five years, including around 15 products that have blockbuster potential.
Pfizer’s growing immuno-oncology portfolio offers a strong potential. Bavencio is being considered a key long-term growth driver for Pfizer. Pfizer has a positive record of earnings surprises in recent quarters. Estimates have gone up slightly ahead of its Q1 earnings release.
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Other noteworthy reports we are featuring today include Marsh & McLennan (MMC), McDonald's (MCD) and MetLife (NYSE:MET).
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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
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The Zacks analyst believes that Concho Resources' $9.5 billion acquisition of RSP Permian will bolster the scale and leadership position of the combined entity in the prolific Permian oil play.
The Zacks analyst likes Broadridge's strategic buyouts, product launches, share repurchases and dividend payouts.
Per the Zacks analyst, Cintas aims to achieve revenue build-up through holistic growth focus although high raw material prices make it susceptible to market risks which are beyond its control.
Per the Zacks analyst, Hibbett is poised to gain from its new e-commerce site that helped contribute 7.6% to sales in fourth-quarter.
Per the Zacks analyst, exit of U.S Retail unit, closing of UK Wealth Management business has freed MetLife from high-risk, non-core operations.
The Zacks analyst believes project start-ups in Angola, Egypt, Ghana, Indonesia and Kazakhstan will aid Eni's 4% targeted output growth through 2021 but is worried over high exploration costs.
According to the Zacks analyst, strong performance in Allegheny's HPMC unit coupled with efforts to improve its cost structure with gross cost-reduction initiatives will drive its earnings in 2018.
The Zacks analyst believes that Concho Resources' $9.5 billion acquisition of RSP Permian will bolster the scale and leadership position of the combined entity in the prolific Permian oil play.
The Zacks analyst likes Broadridge's strategic buyouts, product launches, share repurchases and dividend payouts.
Per the Zacks analyst, Cintas aims to achieve revenue build-up through holistic growth focus although high raw material prices make it susceptible to market risks which are beyond its control.
Per the Zacks analyst, Hibbett is poised to gain from its new e-commerce site that helped contribute 7.6% to sales in fourth-quarter.
Per the Zacks analyst, exit of U.S Retail unit, closing of UK Wealth Management business has freed MetLife from high-risk, non-core operations.
The Zacks analyst believes project start-ups in Angola, Egypt, Ghana, Indonesia and Kazakhstan will aid Eni's 4% targeted output growth through 2021 but is worried over high exploration costs.
According to the Zacks analyst, strong performance in Allegheny's HPMC unit coupled with efforts to improve its cost structure with gross cost-reduction initiatives will drive its earnings in 2018.
New Upgrades/h6
The Zacks analyst believes that robust demand for the Impella line will continue to drive Abiomed's top line. The company also received the FDA pre-market approval (PMA) for its Impella CP heart pump.
Per the Zacks analyst, WestRock's strategy to capitalize on growing demand for corrugated packaging will drive growth. The pending KapStone deal is another step in sync with the strategy.
Per the Zacks analyst, implementation of cost-saving initiatives by divesting redundant units and moderating its expenses on compensation and benefits have aided Marsh & McLennan's bottom line.
The Zacks analyst believes that robust demand for the Impella line will continue to drive Abiomed's top line. The company also received the FDA pre-market approval (PMA) for its Impella CP heart pump.
Per the Zacks analyst, WestRock's strategy to capitalize on growing demand for corrugated packaging will drive growth. The pending KapStone deal is another step in sync with the strategy.
Per the Zacks analyst, implementation of cost-saving initiatives by divesting redundant units and moderating its expenses on compensation and benefits have aided Marsh & McLennan's bottom line.
New Downgrades/h6
The Zacks analyst believes WEC Energy's coal focused electricity production and rising total debts amid increasing interest rates could adversely impact its performance in the long run.
Per the Zacks analyst, UBS Group's net interest income continue to remain under pressure due to the prevailing low rate environment in the European economy. Also, higher legal costs remain a concern.
The Zacks analyst expects competition among fast-casual restaurants to remain fierce on price, service, location and concept, thus keeping McDonald's revenues and margins under pressure.
The Zacks analyst believes WEC Energy's coal focused electricity production and rising total debts amid increasing interest rates could adversely impact its performance in the long run.
Per the Zacks analyst, UBS Group's net interest income continue to remain under pressure due to the prevailing low rate environment in the European economy. Also, higher legal costs remain a concern.
The Zacks analyst expects competition among fast-casual restaurants to remain fierce on price, service, location and concept, thus keeping McDonald's revenues and margins under pressure.
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