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Research Daily

Friday May 5, 2017

Today's Research Daily features new research reports on 16 major stocks, including Gilead (GILD), Dow Chemical (DOW) and MetLife (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, 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 (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 >>>

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