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Research Daily

Wednesday, August 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 CVS Health (CVS), Marriott (MAR) and Enbridge (ENB). 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 >>>

CVS Health shares have outperformed the Zacks categorized Drug Stores industry year to date losing -0.4% vs. -4.4%. CVS Health posted better-than-expected second-quarter 2017 with both adjusted EPS and revenues beating expectations. Year-over-year top line growth was driven by a strong Pharmacy Services segment, benefiting from the upside in the Specialty Pharmacy.

The company’s strong PBM selling season is a major positive. However, poor year-over-year Retail/LTC numbers along with margin debacle resulted in a dull earnings performance by the company in the quarter. Despite an unimpressive bottom-line scenario the company has raised the lower-end of its earnings outlook for 2017 raising investors optimism. The Zacks analyst thinks the Omnicare and Target Pharmacy buyouts should drive enterprise value significantly in the days ahead.

(You can read the full research report on CVS Health here >>>).

Shares of Marriott have outperformed the Zacks Hotels industry in the year-to-date period (the stock is up +25.7% vs. +3.3% gain for the industry). Marriott’s second-quarter 2017 earnings beat expectations and increased year over year. Notably, with the purchase of Starwood, Marriott became the world's largest hotel company. In fact, the acquisition is likely to result in a bigger brand with increased scale and a robust development pipeline in the long run.

The Zacks analyst likes Marriott’s rising North-American business, sizeable international exposure and attractive brand-position. Further, its investments in technology for hotel bookings will improve guest experience, which in turn should boost occupancy. Yet lingering political uncertainties in key international markets, oversupply in some regions and currency headwinds might continue to limit revenue growth. Integration risks linked to Starwood purchase is an added concern.

(You can read the full research report on Marriott here >>>).

Enbridge’s shares have declined -1.9% over the last one year, significantly underperforming the Zacks Oil & Gas Production industry’s gain of +5.7% during the aforesaid period. The company has the longest and most sophisticated crude and liquids pipeline system in the world that spreads over 17,511 miles.

The Zacks analyst likes the merger with Spectra Energy as it has made Enbridge the largest energy infrastructure company in North America in terms of enterprise value. Also, the transaction has given Enbridge the industry’s largest backlog of growth projects, worth around C$75 billion. The company believes that this huge backlog will help it to grow its dividend by 10–12% annually from 2018 to 2024.

However, the company’s substantial debt load is a matter of concern. Also, during second-quarter 2017, Enbridge reported lower-than-expected results owing to higher operating expenses and accelerated maintenance work at the upstream operations of customers.

(You can read the full research report on Enbridge here >>>).

Other noteworthy reports we are featuring today include MetLife (MET), Deutsche Bank (DB) and Aon (AON).

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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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