Today's Must Read
Robust Product Portfolio, Growing Customer Base Boost Ecolab (ECL)
Exelon (EXC) Thrives on Regulated Investments, Acquisitions
Tuesday, August 22, 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 Allergan (AGN), Ecolab (ECL) and Exelon (EXC). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Allergan’s shares have gained +7.1% year to date, outperforming the Zacks Generic Drugs industry, which has declined -19.3% over the same period. Allergan beat estimates for both earnings and sales in the second quarter. Meanwhile, the company raised its 2017 sales and earnings outlook.
The Zacks analyst likes key products like Botox and Linzess as well as new products such as Viberzi and Vraylar which are supporting sales growth. Allergan boasts dominant growth franchises in several areas and is strengthening its product portfolio through strategic acquisitions.
With the closing of the Teva deal, Allergan can now focus on the branded segment. It also boasts a strong branded pipeline with meaningful data read-outs expected in the near term. However, Allergan is facing generic competition for legacy brands like Namenda XR and Asacol HD, which concerns us. Also, competition for key growth drivers like Restasis is a concern.
Shares of Ecolab have gained +11.9% year-to-date, outperforming the Zacks Specialty Chemicals industry which has increased +8.5% over the same period. Ecolab’s second-quarter earnings and revenues surpassed expectations. The Zacks analyst likes Ecolab’s robust product portfolio and expanding customer base, which will likely drive Ecolab organic sales over the long haul. In fact, the realization of targeted synergies associated with acquisitions should also pave way for margin expansion.
The company expects its water, food and beverage, and paper businesses to benefit in the near term. On the flipside, Ecolab operates in highly competitive markets, which might dent its prospects over the long haul. Volatility in foreign currency exchange rates will remain a significant headwind for the company. Ecolab also faces pricing pressure in the Energy segment which is likely to hurt profits.
Exelon shares have gained +14% over the last one year, outperforming the Zacks Electric Power Industry which has gained +8.9% over the same period. The company’s second-quarter earnings and total revenue exceeded expectations due to higher utility earnings attributable to regulatory rate increases.
The Zacks analyst thinks Exelon is well positioned to gain from rate revisions and strong operational performance across its business. Further, the company is benefiting from the Pepco Holdings acquisition. However, Exelon is subject to the impact of commodity price volatility, price fluctuation in the wholesale markets and unfavorable weather conditions. Stringent government regulation is also a cause for concern.
Other noteworthy reports we are featuring today include GlaxoSmithKline (GSK), Valero (VLO) and Rockwell Collins (COL).
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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>>>