Today's Must Read
Kraft Heinz (KHC) Strong on Cost Savings and Innovations
CVS Health (CVS) Rides on Strong PBM Growth amid Retail Woes
Tuesday, September 12, 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 Disney (DIS), Kraft Heinz (KHC) and CVS Health (CVS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Disney’s shares have underperformed the Zacks Media Conglomerates industry over the last three months, declining -7.9% vs. -6.2%, primarily due to ongoing concerns regarding ESPN’s future. Identical to its performances over the past few quarters, ESPN results disappointed in the third quarter yet again.
However, the Zacks analyst likes the company’s decision to terminate its distribution agreement with Netflix for subscription streaming and launch its own streaming services – one for Disney and Pixar brands and another for ESPN followers. Further, in an effort to attract online viewers, Disney which had earlier acquired 33% stake BAMTech announced its intention to acquire another 42% stake in the firm. Moreover, its Movies and Parks & Resorts businesses look promising. Disney also boasts of an impressive lineup of big budget movies up to 2018.
Shares of Kraft Heinz have declined -3.4% year to date, outperforming the Zacks Diversified Food industry which is down -6.3% during the same period. Strong brand portfolio, cost savings initiatives, innovation and marketing efforts raise growth prospects for the company. Though the company’s net sales have been relatively soft, cost savings have led to better results in the second quarter financial results.
The Zacks analyst stresses that soft spending by U.S. shoppers and shift in consumer preference toward natural and organic ingredients over packaged and processed food are hurting the company’s categories.
CVS Health’s shares have outperformed the Zacks Drug Stores industry year to date gaining +3.5% vs. a decline of -1.4%. The Zacks analyst likes the company’s solid 2017 PBM selling season and is also confident about the company's 2018 selling season, which is already off to a strong start. Moreover, the Omnicare and Target Pharmacy buyouts should drive enterprise value significantly in the days ahead.
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. (You can read the full research report on CVS Health here >>>).
Other noteworthy reports we are featuring today include Shire (SHPG), Intercontinental Exchange (ICE) and Ventas (VTR).
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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>>>