Friday May 5, 2017
Today's Research Daily features new research reports on 16 major stocks, including Gilead (GILD), Dow Chemical (DOW) and MetLife (NYSE:MET) (MET).
Gilead 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 -20.7% of its value over the last year vs. the -2.7% decline for the Zacks Biotech industry in that same time period.
Although Gilead’s first-quarter results beat on earnings, revenues missed expectations.Its HCV franchise continues to be under competitive and pricing pressure, leading to a massive decline in Harvoni and Sovaldi sales. These challenges notwithstanding, the Zacks analyst also points towards the company's robust late-stage pipeline. The company's HIV franchise has been performing well, thanks to the newly launched TAF-based products Genvoya, Descovy and Odefsey. Strong uptake for Truvada for use in the pre-exposure prophylaxis setting should also boost sales (You can read the full research report on Gilead here.)
Shares of Dow Chemical have gained +2.3% over the past three months, outperforming the Zacks Chemicals Diversified industry (up +2.2% over the same period). Dow Chemical’s earnings and revenues for first-quarter 2017 topped expectations. The Zacks analyst likes the planned merger with DuPont (NYSE:DD), which is expected to create significant synergies.
Dow should also gain from cost synergies associated with Dow Corning Silicones business and its strategic investments in the U.S. Gulf Coast and the Middle East. Estimates for first-quarter 2017 have also been stable of late. However, Dow’s agriculture business remains affected by depressed crop commodity prices. The company also faces pricing headwinds, feedstock cost pressure as well as weak demand in the energy market. (You can read the full research report on Dow Chemical here.)
MetLife shares have gained +23% over the last one year, nearly in line with the Zacks Multi Line Insurance industry, which has gained +24.9% over the same period. MetLife’s first quarter earnings beat expectations and increased year over year. The Zacks analyst likes MetLife’s consistent growth via acquisitions and divestitures, which allows it to focus on its core business.
The separation of the company’s retail unit will reduce its risk exposure to equity and interest rates. Its efforts to reduce expenses will cushion its bottom line in the long term. A strong balance sheet, improved cash balance and low debt level are other positives. MetLife, nevertheless, remains exposed to headwinds like low interest rates, adverse foreign exchange, taxes, regulatory uncertainty surrounding its SIFI designation, and stiff competition. (You can read the full research report on MetLife here.)
Other noteworthy reports we are featuring today include Tesla (NASDAQ:TSLA) (TSLA), Halliburton (HAL) and Emerson Electric (EMR).
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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 Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here >>>
Today's Must Read
Featured Reports
Tesla (TSLA) Q1 Loss Wider than Estimates, Revenues Top
Tesla's adjusted loss in Q1 was wider than estimates while revenues beat. Per the Zacks analyst, it is set to gain from Model 3 production but lack of sufficient infrastructure is a headwind.
North American Recovery Drives Halliburton (HAL) Q1 Earnings
The covering analyst likes Halliburton's improved utilization on the back of growing North American rig count but believes investor sentiment will remain lukewarm on slow international recovery.
Emerson Q1 (EMR) Earnings in Line; Weak Spending to Hurt
Emerson's Q1 earnings were in line with estimates. Per the Zacks analyst, the company's diligent cost cutting and restructuring actions might be offset by weak client spending in automation business.
LyondellBasell's (LYB) Q1 Mixed, Operational Issues Linger
LyondellBasell's earnings missed estimates in Q1 while sales beat. The covering analyst thinks it should gain from capacity expansion actions amid headwinds from production outages and pricing pressure.
Level 3 Communications (LVLT) Lags Q1 Earnings, Revenues Top
The Zacks analyst thinks Level 3 Communications' strong presence in the enterprise communications market might have driven the top line in first-quarter 2017.
Fifth Third (FITB) Q1 Results Reflect Easing Margin Pressure
The covering analyst thinks Fifth Third's Q1 results reflected margin expansion benefiting from the Fed Rate hikes.
Canadian National (CNI) Beats on Q1 Earnings & Revenues
The Zacks analyst is pleased by the company's outperformance in Q1. Improvement in coal revenues is very encouraging.
New Upgrades
Standard Motor (SMP) Top Q1 Earnings & Revenue, Up Y/Y
Standard Motor's adjusted earnings and revenue increased year over year and beat estimates in first-quarter 2017. Capital deployment, acquisitions and cost reduction initiatives are tailwinds.
Big 5 Sporting (BGFV) Q1 Earnings Top Estimates, Robust View
The Zacks analyst thinks Big 5 posted sales and earnings beat in 1Q17 benefiting from the rationalization in the sporting goods industry. Further, it provided robust second quarter guidance.
Sanofi (PA:SASY) (SNY) Q1 Earnings & Sales Rise Y/Y, Focus on Dupixent
Sanofi's Q1 earnings and sales rose year over year backed by strong specialty care and vaccines sales. The covering analyst is optimistic on sales prospects of eczema treatment Dupixent.
New Downgrades
Verisk (VRSK) Misses Q1 Earnings on Muted Industry Growth
Verisk reported sedate first-quarter 2017 results on muted industry growth and related headwinds, missing the Zacks Consensus Estimate for both adjusted earnings and revenues.
Cabela's (CAB) Tops Q1 Earnings, Revenues Continue to Lag
Cabela's earnings topped estimates in the first quarter but revenues missed the same for the third straight time. The Zacks analyst thinks the top line was impacted by lower store traffic and dismal comps.
RenaissanceRe's (RNR) Q1 Earnings Miss Estimates; Down Y/Y
According to the covering analyst, RenaissanceRe's earnings miss in the first quarter despite revenue growth, primarily stemmed from higher net claims & claim expenses and acquisition-related costs
Tesla Inc. (TSLA): Free Stock Analysis Report
MetLife, Inc. (MET): Free Stock Analysis Report
Halliburton Company (NYSE:HAL): Free Stock Analysis Report
Gilead Sciences, Inc. (NASDAQ:GILD): Free Stock Analysis Report
Emerson Electric Company (NYSE:EMR): Free Stock Analysis Report
Dow Chemical Company (The) (NYSE:DOW): Free Stock Analysis Report
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