Top Stock Reports For Wells Fargo, Broadcom & Gilead
Zacks Investment Research | Jul 10, 2017 05:40AM ET
Monday July 10 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 Wells Fargo (WFC), Broadcom (NASDAQ:AVGO) (AVGO) and Gilead (GILD).These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Wells Fargo’s shares continue to struggle, reflecting lingering issues pertaining to the customer accounts issue. The stock has gained +1.1% year-to-date, underperforming the Zacks Major Banks industry, which is up +7.5% in the same time period. Wells Fargo lacks investment banking and capital markets assets that have been a source of strength for many of its peers lately.
But the bigger issue for the bank has been the customer accounts issue. Troubles have intensified following the bank’s $190-million settlement last year to resolve regulators’ claims of illegally opening millions of illegal accounts. While the current crisis at the company will take some time to alleviate, the Zacks analyst thinks continued growth in loans and deposits, coupled with cost cuts (the bank plans $4 billion in cost cuts by 2019) should help support results.
Regulatory reform remains another potential macro tailwind, though the timing of any legislative enactments on this front remains uncertain. Notably, Wells Fargo received Fed's approval for its 2017 capital plan.
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Shares of Strong Buy rated Broadcom have handily beaten the technology sector as well as the red-hot semiconductor space in the year-to-date period, gaining +35.6%. The Zacks analyst likes the synergistic benefits gained from the merger with Avago, which will drive future profitability.
Seasonal strength in broadband access and sustained cloud data center spending is expected to drive top-line growth in the rest of fiscal 2017. The company recently received U.S. antitrust approval for the buyout of Brocade Communications Systems, which was announced last November and valued at $5.5 billion. However, customer concentration is a significant headwind.
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Gilead’s shares have been laggards lately, on persistent fears about drug pricing and other regulatory issues that haven't eased up even after the November election. The stock has lost -19.8% of its value over the last year vs. the -0.8% decline for the Zacks Biotech industry.
Gilead’s HIV franchise maintains momentum driven by the rapid adoption of TAF-based regimens which now represent 42% of total Gilead HIV prescription volume. Strong uptake for Truvada for use in the pre-exposure prophylaxis setting should also boost sales as the company saw a significant uptick in PrEP usage in 2017.
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However, Gilead will lose exclusivity for Viread this year in some countries outside the U.S., which should impact sales. Additionally, the HCV franchise continues to be undercompetitive and pricing pressure is leading to a massive decline in Harvoni and Sovaldi sales.
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Other noteworthy reports we are featuring today include Ford (F), NextEra Energy (NYSE:NEE) (NEE) and Emerson Electric (EMR).
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple (NASDAQ:AAPL)'s 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade, which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.
Mark Vickery
Senior Editor
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, Public Service Enterprise's stable liquidity and cash flows provide substantial financial flexibility. However, inability to obtain regulatory approvals may hurt its growth.
Per the covering analyst, while Energy Transfer's merger with Sunoco is likely to create synergies and boost growth, legal snags and criticism faced by Dakota pipeline project remains a concern.
Per the Zacks analyst, strong order momentum and the recent Pentair & Permasense acquisitions will boost Emerson's profits.
Per the covering analyst, Target's omnichannel efforts, diversification of assortments and flexible format stores bode well.
The Zacks analyst believes KB Home's aggressive investment in land acquisition and developments will likely boost community count as well as top-line growth.
Per the Zacks analyst, PNC Financial's efforts to drive operational efficiency through CIP goals remain encouraging. Despite rising rates, volatile net interest income remains a concern.
Per the Zacks analyst, Capital One is well poised for top-line growth supported by solid credit card and online banking businesses.
Per the Zacks analyst, Public Service Enterprise's stable liquidity and cash flows provide substantial financial flexibility. However, inability to obtain regulatory approvals may hurt its growth.
Per the covering analyst, while Energy Transfer's merger with Sunoco is likely to create synergies and boost growth, legal snags and criticism faced by Dakota pipeline project remains a concern.
Per the Zacks analyst, strong order momentum and the recent Pentair & Permasense acquisitions will boost Emerson's profits.
Per the covering analyst, Target's omnichannel efforts, diversification of assortments and flexible format stores bode well.
The Zacks analyst believes KB Home's aggressive investment in land acquisition and developments will likely boost community count as well as top-line growth.
Per the Zacks analyst, PNC Financial's efforts to drive operational efficiency through CIP goals remain encouraging. Despite rising rates, volatile net interest income remains a concern.
Per the Zacks analyst, Capital One is well poised for top-line growth supported by solid credit card and online banking businesses.
New Upgrades/h6
The Zacks analyst believes growth in economic activities in NextEra's service territories and investments to strengthen its renewable generation and natural gas operations will act as tailwinds.
Per the covering analyst, Tenet Healthcare (NYSE:THC)'s solid cash position mainly backed by divestitures not only boosts investors' return but also backs growth strategies like acquisitions and partnerships.
Per the Zacks analyst, untapped 4G LTE network raises the growth potential of Latin American markets which along with other strategic business moves have driven Telefonica's revenues.
The Zacks analyst believes growth in economic activities in NextEra's service territories and investments to strengthen its renewable generation and natural gas operations will act as tailwinds.
Per the covering analyst, Tenet Healthcare (NYSE:THC)'s solid cash position mainly backed by divestitures not only boosts investors' return but also backs growth strategies like acquisitions and partnerships.
Per the Zacks analyst, untapped 4G LTE network raises the growth potential of Latin American markets which along with other strategic business moves have driven Telefonica's revenues.
New Downgrades/h6
Per the Zacks analyst, the weakness in Novartis' eye care division, Alcon, due to lower surgical equipments and generic competition for some of its key drugs will negatively impact results in 2017.
Per the Zacks analyst, Ford's 2017 profit is likely to drop due to higher investments in electrification, autonomy and mobility. Weak economic environment in South America also strains its revenues.
The Zacks analyst believes that the temporary slowdown in PharMEDium's growth would mar AmerisourceBergen's bottom line. Lackluster performance in the hepatitis C revenue segment is an added concern.
Per the Zacks analyst, the weakness in Novartis' eye care division, Alcon, due to lower surgical equipments and generic competition for some of its key drugs will negatively impact results in 2017.
Per the Zacks analyst, Ford's 2017 profit is likely to drop due to higher investments in electrification, autonomy and mobility. Weak economic environment in South America also strains its revenues.
The Zacks analyst believes that the temporary slowdown in PharMEDium's growth would mar AmerisourceBergen's bottom line. Lackluster performance in the hepatitis C revenue segment is an added concern.
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