Today's Must Read
BP Plc (BP) to Boost Production, Oil Spill Woes Linger
Productivity Actions, Consumer Focus to Benefit Dow (DOW)
Tuesday June 6, 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 Gilead (GILD), BP (BP), and Dow Chemical (DOW).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 >>>
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 -25.2% of its value over the last year vs. the -9.6% decline for the Zacks Biotech industry. Gilead’s HIV franchise maintains momentum driven by the rapid adoption of TAF-based regimens which now represent 42% of total Gilead HIV prescription volume. Strong uptake for Truvada for use in the pre-exposure prophylaxis setting should also boost sales as the company saw a significant uptick in PrEP usage in 2017. However, Gilead will lose exclusivity for Viread this year in some countries outside the U.S., which should impact sales. Additionally, the HCV franchise continues to be undercompetitive and pricing pressure is leading to a massive decline in Harvoni and Sovaldi sales. (You can read the full research report on Gilead here >>>).
BP share have gained +9.1% over the past 12 months, outperforming the Zacks Oil & Gas-International Integrated industry which has lost -0.8% over the same period, as well as rival Royal Dutch Shell (up +5.1%). The Zacks analyst stresses that the petroleum giant’s upstream projects are expected to generte significant cash flows starting 2020 and beyond. Moreover, the company’s drilling operations are becoming efficient as reflected by the steady decline in non-productive time since 2012. However, the oil spill incident of 2010 in the BP-operated Macondo Prospect continues to affect the company. Although BP has cleared substantial litigation expenses related to the spill, it had to divest some of its best operating properties. The analyst sees the company's dividend to generally safe, but the high yield (currently yielding 6.6%) indicates some market nervousness. (You can read the full research report on BP here >>>).
Dow Chemical shares have gained +11.1% over the past six months, outperforming the Zacks Chemicals Diversified industry (up +7.5% over the same period). 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. 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 >>>).
Other noteworthy reports we are featuring today include Williams Partners (WPZ), America Movil (AMX) and MetLife (MET).
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Director of Research
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>>>