Today's Must Read
Activision's (ATVI) Rising Digital Revenues to Fuel Growth
Enrollment Growth Aids Cigna (CI), Increasing Expenses Hurt
Tuesday, August 8, 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 Biogen (BIIB), Activision (ATVI) and Cigna (CI). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Biogen’s shares have been laggards for a while now; the stock has underperformed the Zacks Biomedicals/Genetics industry in the year-to-date period (+2.6% vs. +9.6%). Biogen surpassed earnings and sales estimates in the second quarter. It also raised its revenue guidance for 2017 with its newest drug Spinraza doing better than expected.
Biogen has a strong position in the MS market with a wide range of products. The Zacks analyst also likes its efforts to diversify beyond MS to other areas like Alzheimer’s. Meanwhile, Spinraza has witnessed faster-than-expected adoption in the U.S. and Biogen is ramping up launch efforts outside the U.S.
However, Biogen has its own set of challenges. Despite its position in the MS market, emergence of new PML cases for Tecfidera are likely to weigh heavily on the stock along with pipeline setbacks. Meanwhile, the recent Ocrevus launch by Roche may create pressure on Tysabri sales.
Shares of Activision have been strong performers this year, with the stock up +73.1% in the year-to-date period vs. the Zacks gaming industry's +47.4% gain in that same time period. Activision reported better-than-expected second quarter 2017 results driven by increasing digital revenues, the King Digital buyout and strength in franchises. The company reported $1 billion from in-game revenues in the quarter.
Activision also raised guidance for the full year. The Zacks analyst likes the company’s attempts to become a broad-based media company. Apart from launching a movie studio and consumer products division, the company is also strengthening its presence in the lucrative e-sports market. However, hit driven and competitive nature of the video game industry begets caution.
Cigna’s shares have gained +31.9% year to date, outperforming the Zacks Multi-Line Insurance industry, which is up +6.4% over the same period. The company’s second-quarter earnings beat expectations and increased year over year, reflecting strong contribution from each of the company’s business segments.
The Zacks analyst likes its robust Global Supplemental business, growing Government business and increasing membership. A strong capital position and resumption of share buyback are the other positives. Cigna is engaged in a legal tussle with Anthem and it is unlikely that it will receive the termination fee and other charges that was due from the latter. Increase in benefits and expenses are other concerns.
Other noteworthy reports we are featuring today include Kraft Heinz (KHC), Cognizant (CTSH) and Equinix (EQIX).
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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>>>