Wednesday, April 5, 2017

Today's Research Daily features new research reports on 16 major stocks, including Aetna (AET), BHP Billiton (BHP) and Sprint (S).

Aetna shares performed strongly following the November election, as did most of the HMO stocks, but the stock has underperformed the peer group since early December on disappointments over the Humana deal. Aetna continues to struggle in the public exchanges and membership growth remains under pressure. Rising medical benefit ratios and cessation of share buybacks are some of the other negatives in the Aetna story.

On the positive side, the Zacks analyst points to the company's long-term growth potential from the government business, management's cost-reduction initiatives and a strong balance sheet. (You can read the full research report on Aetna here.)

Shares of Strong Buy rated BHP Billiton have underperformed the Zacks categorized Mining-Miscellaneous industry in the year to date period (+3% vs. +4.4%) and look marginally overvalued. However, over the last 60 days, estimates for the stock moved north for both fiscal 2017 and 2018. The company’s earnings came in at $0.61 per American Depositary Share (ADS) in first-half fiscal 2017, up from the year-ago tally of $0.08.

The company intends to boost its revenues and margins on the back of increased demand for core metals, asset portfolio solidification, greater innovations and increased productivity. Notably, BHP Billiton is also on track to improve its business through a new operating model designed to make its business less sensitive to market headwinds. (You can read the full research report on BHP Billiton here.)

Sprint’s shares have gained +32.9% over the last six months, outperforming the Zacks-classified Wireless National industry, which has gained +5.9% over the same period. The Zacks analyst likes the company’s efficient use of capital, reduction of cell sites, the elimination of dual networks, backhaul efficiencies, reduced churn, lower roaming charges and energy cost savings. The upcoming launch of 5G technology, promotional plans, tilt toward IP-enabled cloud services, wireless expansion plans, network modernization and integration efforts and sale-leaseback transactions to pay-off its debt are sure to boost its customer base.

On the flip side, high cash burn from promotional offers and discounts, debt-laden balance sheet and decreasing cash flow have led to losses for Sprint. Further, the company’s decision to skip the 600 MHz low-band airwaves auction will save cash for the company but will limit its scope for network upgrades. (You can read the full research report on Sprint here.)

Other noteworthy reports we are featuring today include Qualcomm (QCOM), Capital One Financial (COF) and BlackBerry (BBRY).

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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 >>>