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Research Daily

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 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 >>>

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