Top Stock Reports For Verizon, Express Scripts & Cigna
Zacks Investment Research | Nov 02, 2018 01:50AM ET
Friday, November 2, 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 Verizon (VZ), Express Scripts (ESRX), and Cigna (CI). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Verizon’s shares have gained +18.2% over the past year, outperforming the Zacks Wireless National industry’s increase of +4.8% during the same period. Verizon recorded solid performance in third-quarter 2018, with healthy year-over-year growth in revenues and adjusted earnings that beat their respective expectations.
The Zacks analyst thinks the company remains poised to benefit from the upcoming 5G boom, led by healthy traction in the wireless business. Focus on online content delivery, mobile video and online advertising should also drive growth. However, the company continues to struggle in a highly competitive and saturated wireless market, where spectrum crunch has become a major issue, reducing its profitability to some extent.
Verizon continues to face softer wireline revenues and margins due to technology shifts and ongoing secular pressures from legacy technologies. In an effort to expand its customer base, Verizon is spending heavily on promotion and is also offering lucrative discounts, which is further weighing on margins.
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Shares of Buy-rated Express Scripts have outperformed the Zacks Medical Services industry over the past year, gaining +60.6% vs. +33.9%. Express Scripts ended the third quarter on a solid note, beating both earnings and revenue expectations.
The Zacks analyst thinks the company has been gaining from the strong performance by the core PBM unit. Further, recently-acquired complementary medical-benefit solutions from eviCore is likely to build a comprehensive PBM solution worldwide. Developments in the company’s Inside Rx program buoy optimism.
However, Express Scripts currently faces persistent drug pricing issues. The company is also getting acquired by Cigna by December 2018. Express Scripts announced that its biggest customer and leading health insurer Anthem (NYSE:ANTM) is not likely to extend the PBM agreement with the company anymore.
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Furthermore, the company has currently suspended share repurchase program because of the merger agreement with Cigna. Express Scripts has not provided any guidance for 2018.
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Strong Buy-rated Cigna’s shares have gained +7.1% over the past year, outperforming the Zacks Multi-Line Insurance industry, which has declined -13.9% over the same period. Cigna’s third-quarter earnings beat expectations and increased year over year. Strong performance across the company’s Global Health Care, Global Supplemental Benefits and Group Disability and Life businesses aided earnings.
The Zacks analyst emphasizes that the company is on track to buy Express Scripts, which should raise its rank in the health insurance industry and lead to long-term growth. The company has received approval for the merger from the Department of Justice. A robust Global Supplemental business, growing Government business, increasing membership, and strong capital position are other positives.
A strong 2018 outlook reflects business strength. However, the increase in leverage, rise in operating expenses and suspension of share buyback are concerns.
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Other noteworthy reports we are featuring today include Ecolab (ECL), Fidelity National Information Services (FIS) and eBay (EBAY).
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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, Fidelity is poised to benefit from investment in mobile banking and innovative products such as PayNet and BuyWay. Yet, high outstanding debt level may limit its expansion.
Per the Zacks analyst, regular investments in infrastructure projects and a solid capital investment plan will boost future performance.
The Zacks analyst believes that world-class discoveries made at the Stabroek Block, located off the coast of Guyana will boost Hess' crude production.
The Zacks Analyst is optimistic about strong adoption rate of Abiomed's Impella product line in United States. Impella's patient success stories and increasing global adoptions are major positives.
Per the Zacks analyst, AMETEK's buyouts of FMH Aerospace, Motec, Arizona Instrument and Soundcom are aiding its segmental performance.
Per the Zacks analyst, L3 Technologies makes frequent acquisitions to expand its product portfolio thereby bolstering top line growth.
Per the Zacks analyst, Tractor Supply's balanced investments between new store growth and ONETractor initiative will boost its market share.
Per the Zacks analyst, Fidelity is poised to benefit from investment in mobile banking and innovative products such as PayNet and BuyWay. Yet, high outstanding debt level may limit its expansion.
Per the Zacks analyst, regular investments in infrastructure projects and a solid capital investment plan will boost future performance.
The Zacks analyst believes that world-class discoveries made at the Stabroek Block, located off the coast of Guyana will boost Hess' crude production.
The Zacks Analyst is optimistic about strong adoption rate of Abiomed's Impella product line in United States. Impella's patient success stories and increasing global adoptions are major positives.
Per the Zacks analyst, AMETEK's buyouts of FMH Aerospace, Motec, Arizona Instrument and Soundcom are aiding its segmental performance.
Per the Zacks analyst, L3 Technologies makes frequent acquisitions to expand its product portfolio thereby bolstering top line growth.
Per the Zacks analyst, Tractor Supply's balanced investments between new store growth and ONETractor initiative will boost its market share.
New Upgrades/h6
Per the Zacks analyst, CACI International is benefiting from growing number of awards and contract funding from federal customers. Moreover, a decline in tax rate is aiding margin expansion.
The Zacks analyst believes that Madison Square's entertainment business is primarily gaining from sponsorship and signage revenues. Continuous acquisitions and partnerships are also aiding.
Per the Zacks analyst, solid performance of Rexnord's Process & Motion Control segment, led by strong demand in process industries & commercial-aerospace end markets will lend momentum to the company.
Per the Zacks analyst, CACI International is benefiting from growing number of awards and contract funding from federal customers. Moreover, a decline in tax rate is aiding margin expansion.
The Zacks analyst believes that Madison Square's entertainment business is primarily gaining from sponsorship and signage revenues. Continuous acquisitions and partnerships are also aiding.
Per the Zacks analyst, solid performance of Rexnord's Process & Motion Control segment, led by strong demand in process industries & commercial-aerospace end markets will lend momentum to the company.
New Downgrades/h6
The Zacks analyst is pessimistic about Ecolab's lackluster outlook for the Energy segment. This apart, cutthroat competition in Chemical Specialty markets is a concern.
The Zacks analyst believes that higher expenses and slow-than-expected e-commerce growth could impact results. Also, increasing competition in the e-commerce payment space remains a concern.
Per the Zacks analyst, Host Hotels' productivity gains and capital-recycling efforts are encouraging. Yet, supply growth and dilutive impact of dispositions on near-term profitability remain concerns.
The Zacks analyst is pessimistic about Ecolab's lackluster outlook for the Energy segment. This apart, cutthroat competition in Chemical Specialty markets is a concern.
The Zacks analyst believes that higher expenses and slow-than-expected e-commerce growth could impact results. Also, increasing competition in the e-commerce payment space remains a concern.
Per the Zacks analyst, Host Hotels' productivity gains and capital-recycling efforts are encouraging. Yet, supply growth and dilutive impact of dispositions on near-term profitability remain concerns.
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