Monday May 8, 2017
Today's Research Daily features new research reports on 16 major stocks, including United Technologies (UTX), Lilly (LLY) and American Express (AXP).
United Technologies shares have gained +10.2% over the last three months, higher than the +4.5% increase for the Zacks Conglomerates sector. The company recorded solid first-quarter 2017 results with healthy year-over-year increase in revenues and adjusted earnings that exceeded expectations. United Technologies also reaffirmed its guidance for 2017 on favorable growth dynamics.
The Zacks analyst likes the business mix and diversification which allows the company to deliver consistent earnings and dividend growth. The company is focused on revamping its aerospace unit to overhaul the organizational structure and accelerate inorganic growth through potential acquisition opportunities.
On the flip side, the company remains exposed to a weak global macroeconomic backdrop and uncertainty about the Trump administration's trade policy. Other issues include exposure to market price volatility and availability risks related to raw materials. (You can read the full research report on United Technologies here.)
Pharmaceutical stocks have been under pressure since last year on pricing and regulatory concerns but Eli Lilly shares have managed to buck the trend to some extent. The stock has outperformed its peer group; it is up +9.2% over the last 12 months vs. +2.8% for the Zacks Pharma industry and +2.5% for the Zacks Medical sector Lilly’s first-quarter 2017 results were mixed with earnings beating estimates but revenues missing.
But the Zacks analyst is encouraged by the fact that Lilly expects to launch 20 new products in a 10 year time-frame ranging from 2014 to 2023 and could launch at least 2 new indications/line extensions on average every year. Moreover, Lilly returned to annual dividend increases in Dec 2016 and is also returning excess cash through share buybacks. (You can read the full research report on Eli Lilly here.)
American Express' first quarter earnings exceeded expectations but declined year over year. The company also continues to witness mounting loan loss provisions. Moreover, a strong U.S. dollar, loss of Costco (NASDAQ:COST) as a client and intense competition remain major near-term concerns. However, the company has raised its guidance for 2017.
Additionally, over the last year, the company has gained +22.4%, higher than the broader finance sector’s gain of +20.9%. The Zacks analyst also likes its solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments. (You can read the full research report on American Express here.)
Other noteworthy reports we are featuring today include Aetna (AET), Las Vegas Sands (LVS) and Capital One (COF).
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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
Las Vegas Sands (LVS) Q1 Earnings Top, Poised for Growth
Despite weak results at its properties in Macao, an improving operating environment there bodes well, per the Zacks analyst.
Aetna (AET) Earnings Beat, Revenues Miss Estimates in Q1
The covering analyst views favorably Aetna's strong Q1 earnings, which benefitted from its Government business, cost control efforts, partly offset by weak exchange business, high medical benefit ratio.
Capital One (COF) Q1 Results Show Continued Revenue Growth
The Zacks analyst expects Capital One's revenue to continue benefiting from strength in its credit card and online banking businesses. However, worsening asset quality remains a major headwind.
Public Storage (NYSE:PSA) Q1 Results Disappoint Amid Soft Demand
The covering analyst thinks Public Storage has a high brand value and makes strategic acquisitions. Yet, lower-than-expected Q1 result is disappointing.
Franklin (BEN) Results Depict Cost Control; Outflow Recorded
The Zacks analyst thinks Franklin's efforts to drive operational efficiency remain encouraging. It also continues to benefit from a strong capital position. However, net outflows are a concern.
Ingersoll (IR) Beats Q1 Earnings & Revenues, Reiterates View
Ingersoll reported solid first-quarter 2017 results with revenues and adjusted earnings exceeding the respective Zacks Consensus Estimates.
Hershey (HSY) Tops Earnings, Cost Saving Plans to Spur Growth
The covering analyst remains upbeat about Hershey's Q1 performance. Focus on innovation, supply chain savings and productivity gains should drive growth.
New Upgrades
Humana (NYSE:HUM) Beats Q1Earnings on Strong Retail Segment
The Zacks analyst thinks Humana's earnings outperformance was driven by its retail segment's performance, each sub-segment of which delivered better that expected results in the first quarter
ICICI Bank (IBN) Q4 Results Reflect Improving Revenue Trends
The covering analyst thinks ICICI Bank is well positioned to capitalize on revenue growth opportunities given the increased dependence on domestic loans and focus on improving fee income.
American Financial (AFG) Beats Q1 Earnings Estimates
American Financial's first-quarter 2017 earnings beat expectations and improved year over year on higher operating earnings at Specialty Property and Casualty (P&C) insurance and Annuity segments.
New Downgrades
Denbury Resources' (NYSE:DNR) Q1 Loss Wider Than Expected
The Zacks analyst agrees that significant lower production level during first-quarter 2017 led Denbury Resources to post wider than expected loss in Q1. The firm's high debt load also concerns us.
Akamai (AKAM) Beats on Q1 Earnings & Revenues, Shares Down
The covering analyst thinks intensifying competition and pricing pressure along with plunging revenues from big internet companies will continue to hurt Akamai's growth prospects going ahead.
Cheesecake Factory's (CAKE) Challenges Continue Post Q1
A lowered full-year outlook due to prevailing challenging restaurant environment could continue to weigh on Cheesecake Factory's performance, per the Zacks analyst. Rising costs are also a concern.
United Technologies Corporation (NYSE:UTX
Las Vegas Sands Corp. (LVS): Free Stock Analysis Report
Eli Lilly and Company (NYSE:LLY
Capital One Financial Corporation (NYSE:COF
American Express Company (NYSE:AXP
Aetna Inc. (NYSE:AET
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Zacks Investment Research