Today's Must ReadNo Report.
Monday, October 2, 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 Procter & Gamble (PG), PetroChina (PTR) and Biogen (BIIB). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-rated Procter & Gamble’s estimates are trending upward over the last 60 days, hinting analysts’ optimism about the company. P&G is known for its strong brand recognition, diversified portfolio, impressive product development capabilities and marketing prowess, as well as strong cash flow productivity. The company is investing in its brands and products as well as redesigning the supply chain to improve productivity and organic growth.
Procter & Gamble is speeding up innovations and investments to counter the softening industry growth. Its productivity improvements and cost-saving efforts are also consistently helping to boost profit level. However, major foreign exchange headwind, weak volumes, divestitures and slowing market growth have been hurting sales.
A soft consumer-spending environment in developed markets and uncertainties in emerging countries also add to the worries. Shares of Procter & Gamble have underperformed the Zacks Soap and Cleaning Materials industry so far this year (+8.2% vs. +18.1%).
ADRs of PetroChina have declined -12.6% over the last six months, underperforming the Zacks International Integrated Energy industry, which has gained +6.2% over the same period. But with higher oil prices helping the state-run giant report a jump in first-half profits, the stock might return to favor.
The energy titan's biggest unit – exploration and production – swung to profitability as oil price soared 50%. PTR also experienced strong natural gas demand, while operational optimization helped control costs. However, the analyst is concerned over China’s decision to cut natural gas prices for industrial users that reduced margins in PTR’s gas-wholesale business.
A limited international operation and an ambitious investment program give investors more reason to be cautious on the stock. Hence, while being incrementally positive on PTR, the analyst expects the ADRs to remain soft.
Shares of Buy-rated Biogen have outperformed the Zacks Biomedicals/Genetics industry in the last six months (+14.8% vs. +13.3%). Biogen has a strong position in the MS market, backed by a wide range of products. Newly launched Spinraza for spinal muscular atrophy is also off to a promising start.
Spinraza has witnessed faster-than-expected adoption in the U.S. and Biogen is ramping up launch efforts outside the U.S. The Zacks analyst is also encouraged by Biogen’s efforts to diversify beyond MS to other areas like Alzheimer’s.
The company also spun off its hemophilia business in Feb 2017, which allows it to focus on neurology, its key area of expertise. Estimates have moved up ahead of the Q3 earnings results. The company has a positive record of earnings surprises in recent quarters.
However, Biogen has its own set of challenges. Despite its position in the MS market, the 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’s sales.
Other noteworthy reports we are featuring today include Accenture (ACN), Halliburton (HAL) and Norfolk Southern (NSC).
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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>>>