Today's Must Read
Rising Margins Aid BNY Mellon (BK), Concentration Risk a Woe
Celgene's (CELG) Revlimid Looks Solid, Abraxane Under Pressure
Wednesday, September 20, 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 Northrop Grumman (NOC), Bank of New York Mellon (BK) and Celgene (CELG). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-rated Northrop continues to enjoy strong presence in Air Force, Space & Cyber Security programs. Moreover, its product innovation and focus on strengthening its ISR wing will help maintain a stable earnings stream amid the rapidly changing needs of the defense landscape. The company maintains a strong balance sheet and steady cash flow that offer substantial financial flexibility.
To this end, apart from paying solid dividends to its shareholders, Northrop also follows a share buyback policy to maintain a disciplined cash deployment strategy. Also, recent budgetary amendments made by the Trump administration have been in favor of defense biggies like Northrop. However, too much dependence on fixed-price contracts remains a concern for the stock.
BNY Mellon's shares have outperformed the industry in the last six months (+12.1% vs. +6.8%). The performance was supported by the company’s decent earnings surprise history. It surpassed the Zacks Consensus Estimate for earnings in two of the trailing four quarters. The company’s easing margin pressure (driven by gradual rise in interest rates), potential lesser regulations and rising loan demand are expected to aid top-line growth.
Also, the company’s cost-saving initiatives are likely to improve profitability in the quarters ahead. However, concentration risk arising from significant dependence on fee-based income remains a matter of concern in the near term.
Shares of Celgene have outperformed the industry in the year so far, gaining (+24% vs. +15.3%). Celgene’s Revlimid continued to outperform driven by further market share increases in newly diagnosed myeloma and the continued increase in treatment duration. Other key products – Pomalyst/Imnovid, Abraxane and Otezla – also performed well. The consecutive increase in annual earnings guidance is also a positive.
Celgene continues to progress with its label expansion efforts and pipeline development with sNDA submission for Revlimid in newly diagnosed multiple myeloma targeted for first-quarter 2018. The approval of Idhifa in the U.S. for relapsed and/or refractory acute myeloid leukemia has further boosted the company’s portfolio. However, Celgene is highly dependent on Revlimid while foreign exchange headwinds are expected to continue while Abraxane sales are under competitive pressure.
Other noteworthy reports we are featuring today include Anthem (ANTM), Johnson & Johnson (JNJ) and Colgate-Palmolive (CL).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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>>>