Top Stock Reports For BP, Gilead, Enterprise Products & Colgate
Zacks Investment Research | May 03, 2018 11:48PM ET
Friday, May 4, 2018
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 17 major stocks, including BP (LON:BP), Gilead (GILD), Enterprise Products (EPD) and Colgate (CL). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Strong Buy-ranked BP’s shares are up +26.7% over the last year, outperforming the Zacks International Integrated Oil industry (up +16.1%). The integrated energy company has been gaining on the back of a strong portfolio of upstream projects. Since 2016, BP has placed 13 key upstream projects online, including Atoll Phase 1 & Zohr, driving the company’s record first-quarter 2018 production. Notably, since the October-December quarter of 2010, the first-quarter output has been the highest.
The Zacks analyst appreciates the company’s commitment to return cash to shareholders through dividend payments. The company’s dividend yield of almost 4% is way higher than 1.9% of the S&P 500. In fact, the strong first-quarter 2018 results have raised expectations of a hike in quarterly dividend soon which will mark the company’s first dividend raise since 2014.
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Shares of Buy-rated Gilead have outperformed the Zacks Biotech industry in the last six months, losing -10% vs. a decline of -13%. Gilead’s first-quarter results were disappointing with both earnings and sales missing estimates as the magnitude of the decline in HCV sales was wider-than-expected due to lower patient starts and increasing competition.
Nevertheless, Gilead is now banking on its HIV franchise and newer avenues like the CAR-T therapy to drive growth. The HIV franchise maintains momentum driven by the rapid adoption of Descovy-based regimens. The FDA approval of Biktarvy has further widened the portfolio.
The CHMP has also adopted a positive opinion on the regimen and a tentative approval is expected in the third-quarter. The initial uptake of Yescarta is encouraging. Meanwhile, Gilead is intending to foray into the NASH market with selonsertib and filgotinib. Both the candidates are being evaluated in late stage studies and a tentative approval will diversify Gilead’s portfolio
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Enterprise Products’ shares have gained +6.1% over the last six months, even as the Zacks Oil Production Pipeline MLP industry declined by -5.3%. Enterprise Products Partners' extensive network of pipeline that is spread across 50,000 miles is noteworthy. The pipeline network is connected to every major U.S. shale play and provides services to producers and users of commodities by transporting gas, liquids and refined products.
Enterprise Products has a strong commitment to return cash back to the unitholders. The partnership has raised its cash distribution for 55 successive quarters, reflecting stable fee-based cash flow from diversified midstream assets. Also, during first-quarter 2018, Enterprise’s earnings and revenue beat expectations. However, Enterprise Products’ excessive reliance on debt reflects its balance sheet weaknesses.
The Zacks analyst is also concerned about Enterprise Products’ rising operating costs. The partnership’s units have lost 0.9% over the last year, as compared to the industry's 19.4% decline.
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Shares of Colgate have lost -9.3% over the last three months, underperforming the Zacks Consumer Staples sector, which has declined -8.6% over the same period. However, Colgate has been popular with investors for its meet or beat earnings track record. Continuing with this trend, the company delivered an earnings beat in first-quarter 2018, after three consecutive quarters of in line earnings. Results continue to be driven by sales growth and significant market share gains.
The Zacks analyst thinks the company remains on track with the brand building and productivity maximization initiatives. Consequently, it provided a robust outlook for 2018. Further, the company is encouraged by the progress on Global Growth and Efficiency Program along with additional savings anticipated from the recent expansion of the program.
However, its margins continue to be strained due to higher raw material and packaging costs. Moreover, Colgate expects the backdrop to remain challenging in 2018 due to uncertain global markets and slowing category growth worldwide.
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Other noteworthy reports we are featuring today include Prologis (PLD), Public Storage (NYSE:PSA) and Prudential Financial (NYSE:PRU).
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Today's Must Read/h6
Featured Reports/h6
The Zacks analyst believes E*TRADE is poised to growth through improving trading activities as DARTs continue to rise. Moreover, restructuring moves and easing margin pressure is favorable.
The Zacks analyst believes that Yum! Brands' refranchising efforts are facilitating EPS growth.
Per the Zacks analyst, CBRE Group will benefit from improving occupier outsourcing business, leasing, property sales and strategic acquisitions.
Per the Zacks analyst, solid sales volume coupled with strong operational performance enhance Harris' growth momentum, although escalating operating costs remain a concern.
Per the Zacks analyst, Prudential is set to grow on its high performing asset management business, international operations and deeper reach in the pension risk transfer market.
Per the Zacks analyst, Public Storage is poised to gain from its high brand value, strategic acquisitions and robust presence in key cities.
Per the Zacks analyst, Prologis is well poised to benefit from high demand for industrial real estate space. Its move to buy DCT Industrial will be conducive to FFO.
The Zacks analyst believes E*TRADE is poised to growth through improving trading activities as DARTs continue to rise. Moreover, restructuring moves and easing margin pressure is favorable.
The Zacks analyst believes that Yum! Brands' refranchising efforts are facilitating EPS growth.
Per the Zacks analyst, CBRE Group will benefit from improving occupier outsourcing business, leasing, property sales and strategic acquisitions.
Per the Zacks analyst, solid sales volume coupled with strong operational performance enhance Harris' growth momentum, although escalating operating costs remain a concern.
Per the Zacks analyst, Prudential is set to grow on its high performing asset management business, international operations and deeper reach in the pension risk transfer market.
Per the Zacks analyst, Public Storage is poised to gain from its high brand value, strategic acquisitions and robust presence in key cities.
Per the Zacks analyst, Prologis is well poised to benefit from high demand for industrial real estate space. Its move to buy DCT Industrial will be conducive to FFO.
New Upgrades/h6
Per the Zacks analyst, Shutterfly's buyout of Lifetouch will continue to drive the company's top-line. The company's focus on improving operational efficiency through major restructuring bodes well.
Per the Zacks analyst, Akamai benefits from strong demand for Kona Site defender and Prolexic solutions as well as new Bot Manager Premier and Nominum services.
Masimo's SET pulse oximetry business is gaining prominence globally. Per the Zacks analyst, solid uptake of non-invasive patient monitoring technology in the U.S. MedTech, is also a positive.
Per the Zacks analyst, Shutterfly's buyout of Lifetouch will continue to drive the company's top-line. The company's focus on improving operational efficiency through major restructuring bodes well.
Per the Zacks analyst, Akamai benefits from strong demand for Kona Site defender and Prolexic solutions as well as new Bot Manager Premier and Nominum services.
Masimo's SET pulse oximetry business is gaining prominence globally. Per the Zacks analyst, solid uptake of non-invasive patient monitoring technology in the U.S. MedTech, is also a positive.
New Downgrades/h6
Per the Zacks analyst, Pentair's margins in fiscal 2018 will be impacted by higher material and other costs. Also, risks pertaining to the separation of the Electrical business add to the concerns.
Per the Zacks analyst, Cooper Tire's operating profit is hurt by weak volumes and high raw materials prices. Adjusting production in line with demand and inventory led to higher costs.
Per the Zacks analyst, soft demand due to uncertain global macro environment and anticipation of potentially weak investment patterns among customers remain major headwinds for Juniper.
Per the Zacks analyst, Pentair's margins in fiscal 2018 will be impacted by higher material and other costs. Also, risks pertaining to the separation of the Electrical business add to the concerns.
Per the Zacks analyst, Cooper Tire's operating profit is hurt by weak volumes and high raw materials prices. Adjusting production in line with demand and inventory led to higher costs.
Per the Zacks analyst, soft demand due to uncertain global macro environment and anticipation of potentially weak investment patterns among customers remain major headwinds for Juniper.
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