Today's Must Read
Pfizer's (PFE) New Drugs Like Ibrance to Counter Generic Woes
Huge Defense Deals Aid Boeing (BA), 747 Demand Remains Weak
Monday June 19 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 Chevron (CVX), Pfizer (PFE) and Boeing (BA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Chevron has handily outperformed the Zacks Integrated Oil Industry over the past year (up +5.4% vs. +0.3%), as well as larger rival ExxonMobil which saw its stock go down -8.7% over the same time period. Chevron's gains reflect the momentum generated by better-than-expected earnings in 3 of the last 4 quarters on the back of rebounding commodity prices, lower expenses and improved U.S. refining environment.
Moreover, Chevron's focus on the prolific Permian basin should allay investor fears about production growth trajectory over the next few years. However, with oil testing the psychologically-critical $50 threshold again, the near-to-medium term revenue outlook for Chevron – one of the most oil-weighted majors – remains cloudy.
Chevron is still outspending its cash flow, making it dependent on asset sales. Hence, the Zacks analyst thinks investors should wait for a better entry point before buying shares in America's second largest oil company.
Shares of Pfizer have underperformed the peer group as well as the broader market over the past year (the stock is down -4.3% over the last year vs. a +5.5% increase for the Zacks Large-Cap Pharma industry and the +16.8% gain for the S&P 500 index) on continued drug pricing uncertainty that have refused to go away even after the election. These headwinds notwithstanding, the Zacks analyst is pointing out that Pfizer is strengthening its product portfolio as well as pipeline through acquisitions and licensing deals.
Also, cost-savings and share buybacks should help Pfizer achieve its earnings guidance. New products like Ibrance and contribution from acquisitions are expected to drive revenues. While the Hospira acquisition has significantly expanded Pfizer's sterile injectable and biosimilar capabilities, the Medivation deal has strengthened its cancer franchise by adding Xtandi to its portfolio.
Boeing’s shares have surged +49.5% over the past one-year, outperforming the Zacks Aerospace & Defense sector, which gained +26.8% during the same time period. The Zacks analyst stresses that rising demand for its commercial airplanes on the back of steady improvement in passenger and freight traffic is the major factor behind the surge in Boeing shares.
These developments reflect the company’s latest expansion on the international front, apart from its strong presence in the domestic aviation market. The improving outlook for defense spending under the Trump administration is another long-term positive in the Boeing story.
However, challenges including uncertain fate of high-cost programs, risks related to key project executions, order cancellations as well as stiff competition might have a negative impact on the company. Also deferred production cost for Boeing’s 787 Dreamliner remains a major cause of concern for the company.
Other noteworthy reports we are featuring today include Comcast (CMSA), 3M (MMM) and Citigroup (C).
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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>>>