Top Stock Reports For Amgen, Comcast & McDonald's
Zacks Investment Research | Oct 27, 2017 02:59AM ET
Friday, October 27, 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 Amgen (AMGN), Comcast (CMCSA) and McDonald's (MCD). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Buy-rated Amgen’s shares have gained +20.7% year to date, outperforming the Zacks Biomedical and Genetics industry, which has gained +3.7% over the same period. Amgen beat expectations for both earnings and sales in the third quarter of 2017 and raised its earnings guidance for 2017 supported by effective cost management.
Amgen’s newer drugs – Prolia, Xgeva, Vectibix, Nplate and Sensipar – are performing well. Amgen is also progressing with its pipeline including biosimilar drugs. Additionally, the Zacks analyst thinks Amgen’s restructuring plan is making it leaner and more cost efficient.
However, the company has some challenges in store, given the presence of biosimilar competition and slowdown in sales of mature drugs. While Neupogen is already facing U.S. biosimilar competition, Neulasta and Epogen could start facing the same next year.
Also the softness in Enbrel sales due to stiff competitive and pricing pressure is a key cause for concern. Meanwhile, uptake of key new drug Repatha has been slow due to payer restrictions.
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Shares of Comcast have lost -8.2% over the last three months, during which the Zacks Cable Television industry has declined -10.4%. Comcast posted mixed third-quarter 2017 financial results. Comcast completed the nationwide rollout of its wireless services under the Xfinity Mobile brand, with plans to include YouTube in its X1 video platform.
The company is venturing into residential solar programs with a 40-month deal with Sunrun. Comcast is working towards 5G network deployment and continues to roll out its DOCSIS 3.1-based internet services to Comcast Business customers. Comcast continues to expand its theme park business.
With this, Comcast aims to check customer churn and provide viewers with more streaming options. However, tough competition, consolidation-related woes, mounting programming costs, loss of customer base act as near-term risks for Comcast. Comcast lost 94,000 voice customers and 1,25,000 video customers in the third-quarter 2017 due to cord-cutting.
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McDonald's shares have gained +5.2% over the last three months, outperforming the Zacks Restaurants industry which has gained +2.6% over the same period. McDonald’s third-quarter adjusted earnings of $1.76 per share beat expectations and rose year over year. Total revenue declined year of year due to refranchising and lagged the consensus mark.
Meanwhile, Q3 marked the ninth consecutive quarter of global comps growth and third consecutive quarter of comparable guest count growth for McDonald’s. The Zacks analyst likes the fact that McDonald’s is trying to reinforce its position worldwide via various sales and digital initiatives. Also, increased focus on refranchising is expected to reduce its capital requirements, thereby facilitating EPS growth and ROE expansion in the long run.
Yet higher costs along with currency headwinds may hurt profits. Also, a soft industry backdrop in the United States and macroeconomic concerns in some parts of the world might limit sales growth.
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Other noteworthy reports we are featuring today include Stryker (SYK), Waste Management (WM) and BB&T (BBT).
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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
Today's Must Read/h6
Featured Reports/h6
Per the Zacks analyst, WEC Energy's cost savings initiatives will boost margins and expanding customer base will increase demand for utility services.
The Zacks analyst appreciates the company's healthy net subscriber growth. The company's efforts to reward shareholders, through dividends and buybacks, also raise optimism in the stock.
Per the Zacks analyst, Waste Management is focusing on core businesses to instill price and cost discipline for better margins, although stringent government regulations remain impediments to growth.
Per the Zacks analyst, Dolby's partnerships with industry frontrunners like Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL), Amazon and Netflix (NASDAQ:NFLX) will boost market traction of Dolby Vision, Dolby Voice and Dolby Cinema's offerings.
The Zacks analyst thinks solid performance in Stryker's MAKO platform drove third-quarter revenues. Upbeat guidance for the full year instills confidence in the stock.
Per the Zacks analyst, loan and deposit growth, improving economy and higher interest rates will continue to support BB&T's profitability.
Per the Zacks analyst numerous acquisitions made by the company have enabled it to enter new geographical regions & develop new segments, leading to top line growth.
Per the Zacks analyst, WEC Energy's cost savings initiatives will boost margins and expanding customer base will increase demand for utility services.
The Zacks analyst appreciates the company's healthy net subscriber growth. The company's efforts to reward shareholders, through dividends and buybacks, also raise optimism in the stock.
Per the Zacks analyst, Waste Management is focusing on core businesses to instill price and cost discipline for better margins, although stringent government regulations remain impediments to growth.
Per the Zacks analyst, Dolby's partnerships with industry frontrunners like Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL), Amazon and Netflix (NASDAQ:NFLX) will boost market traction of Dolby Vision, Dolby Voice and Dolby Cinema's offerings.
The Zacks analyst thinks solid performance in Stryker's MAKO platform drove third-quarter revenues. Upbeat guidance for the full year instills confidence in the stock.
Per the Zacks analyst, loan and deposit growth, improving economy and higher interest rates will continue to support BB&T's profitability.
Per the Zacks analyst numerous acquisitions made by the company have enabled it to enter new geographical regions & develop new segments, leading to top line growth.
New Upgrades/h6
Per the Zacks analyst, given the strength in its credit card and online banking operations along with inorganic expansion efforts, Capital One's profitability should continue improving.
Strong uptakes of consumables and instrument continue to act as a major reason for Illumina's steady growth. Per the Zacks analyst, the raised outlook indicates this bullish trend is likely to remain.
Apart from solid execution, the Zacks analyst believes robust System Test demand, opportunities in the high-growth memory test market and continuous design wins are positives for Teradyne.
Per the Zacks analyst, given the strength in its credit card and online banking operations along with inorganic expansion efforts, Capital One's profitability should continue improving.
Strong uptakes of consumables and instrument continue to act as a major reason for Illumina's steady growth. Per the Zacks analyst, the raised outlook indicates this bullish trend is likely to remain.
Apart from solid execution, the Zacks analyst believes robust System Test demand, opportunities in the high-growth memory test market and continuous design wins are positives for Teradyne.
New Downgrades/h6
Per the Zacks analyst, lackluster performance in Varian's proton therapy unit would affect the company's growth trajectory in near term. Cutthroat competition in radiation-therapy space is a concern.
High operating expenses, mainly due to the uptick in fuel prices, worries the Zacks analyst. Deterioration in operating ratio is also a negative. The company's high debt levels also raise concerns.
Per the Zacks analyst, higher raw material costs and unfavorable price/mix impacted Whirlpool's operating margin in third-quarter 2017. It expects raw material inflation to persist through 2018.
Per the Zacks analyst, lackluster performance in Varian's proton therapy unit would affect the company's growth trajectory in near term. Cutthroat competition in radiation-therapy space is a concern.
High operating expenses, mainly due to the uptick in fuel prices, worries the Zacks analyst. Deterioration in operating ratio is also a negative. The company's high debt levels also raise concerns.
Per the Zacks analyst, higher raw material costs and unfavorable price/mix impacted Whirlpool's operating margin in third-quarter 2017. It expects raw material inflation to persist through 2018.
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