Today's Must Read
Las Vegas Sands (LVS) Diversifies, Regulations a Concern
Aetna's (AET) Government Business Grows, Exchange Loss Hurts
Friday, June 9, 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 American Express (AXP), Las Vegas Sands (LVS) and Aetna (AET).These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
American Express shares have gained +23.6% over the last year, higher than the broader finance sector’s gain of +20.2%. The Zacks analyst likes its solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments. Its strategic initiative focusing on platinum card portfolio and OptBlue program will drive business volume. It is also benefiting from cost reduction efforts, and return of significant amounts of capital to shareholders through dividend and share buyback programs. The stock has witnessed an upward revision in earnings estimate over the past 60 days. However, increase in provision for losses, a strong U.S. dollar, loss of Costco as a client and intense competition remain major near-term concerns.
Shares of Las Vegas Sands have gained +39.6% over the last one year, marginally higher than the gaming industry’s increase of +38.6%. This strong performance reflects the company's exposure to the improving outlook for Macao where gaming revenues appear to have started growing again after struggling over the last few years. The addition of The Parisian Macao has further strengthened its Cotai Strip portfolio of properties. With stable operations beyond Macao (Vegas & Singapore) and limited capex needs going forward, the outlook for cash returns to shareholders through dividends (the stock yields an attractive 4.5% at present) and buybacks has notably brightened. The Zacks analyst points out in the updated research report published today that it will take some time for the region to return to its former glory as concerns related to the sustainability of revenues from the VIP market linger.
Aetna’s shares have outperformed the Zacks Medical HMO industry year to date (up +20.1% vs. +17.7%). Aetna expects long-term growth from its Government business. The Zacks analyst likes its cost-reduction initiatives and growing ACO collaborations which have paved the way for long-term growth. A strong balance sheet is another positive. The stock has also witnessed an upward revision in earning estimates over the past 60 days. However, Aetna’s merger with Humana, which would have raised its rank in the industry, has been called off. Aetna has also been incurring losses in its public exchange business and has been exiting exchanges to avoid losses from this business. Furthermore, its membership growth remains under pressure. Increasing medical benefit ratios are also likely to hurt margins.
Other noteworthy reports we are featuring today include Yahoo (YHOO), Amphenol (APH) and Baker Hughes (BHI).
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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>>>