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Top Research Reports for Merck, UPS & Caterpillar

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Friday, November 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 Merck (MRK - Free Report) , UPS (UPS - Free Report) and Caterpillar (CAT - Free Report) . These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Merck’s shares have underperformed the Zacks Large Cap Pharmaceuticals industry over the last year, losing -12.1% versus +13.2%. Merck beat estimates for earnings while missing the same for sales in Q3. Merck’s new products like Keytruda and Zepatier should continue to contribute meaningfully to the top line.

Keytruda is gaining strong momentum from the new indication of first-line lung cancer. The Keytruda development program also significantly advanced this year with several key regulatory approvals. Meanwhile, Merck will continue to focus on cost-cutting initiatives to drive the bottom line.

However, generic competition for several drugs and pricing pressure will continue to be overhangs on the top line. Rising competition in the immuno-oncology market is also a significant concern. The recent delay in the readout from an important lung cancer study and withdrawal of a European application for Keytruda+chemo in first-line lung cancer were disappointing.

(You can read the full research report on Merck here >>>).

Shares of UPS have underperformed the Zacks Air Freight and Cargo industry as well as rival FedEx on a year-to-date basis. While UPS has lost -1.9% of its value, the industry it belongs to and FedEx have rallied +4.6% and 16.8%, respectively, in the same period. In the third quarter of 2017, the company reported better-than-expected earnings per share and revenues despite the effect of recent hurricanes.

Moreover, both metrics improved on a year-over-year basis. The upside was driven by growth across all the key segments of the company. UPS also expects the upcoming holiday season to be a highly successful one on the back of the growing demand for e-commerce.

However, high costs are limiting bottom-line growth as the company is making significant investments to upgrade its facilities. Furthermore, foreign currency-related headwinds seem to hurting results, as UPS operates globally.

(You can read the full research report on UPS here >>>).

Strong Buy-rated Caterpillar’s have gained +46% year-to-date, outperforming the Zacks Construction and Mining industry which has increased +44.3% over the same period. Caterpillar delivered another upbeat quarter with adjusted earnings per share surging 129% year over year and revenues rising 25%.

Both beat respective expectations aided by strong demand for construction equipment in North America, robust sales in China and cost-control efforts. Caterpillar hiked 2017 guidance, to revenues of $44 billion and earnings per share of $6.25. The mid-point of the ranges reflects a year-over-year growth of 14% and 83%, respectively. Higher sales in Asia Pacific and North America, improved order rates and backlog will fuel growth in Construction Industries.

Resource Industries will gain on higher aftermarket parts sales. Energy & Transportation will be buoyed by improved sale of engines into industrial applications, strength in onshore North America oil and gas and transportation. Further, ongoing efforts to reduce costs will help boost margins.

(You can read the full research report on Caterpillar here >>>).

Other noteworthy reports we are featuring today Blackstone (BX - Free Report) , Delta (DAL - Free Report) and Anadarko .

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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>>>

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