Today's Must Read
5G Mobile Network to Lift AT&T (T), Wireless Competition Ails
Equity Business Restructuring to Aid BlackRock's (BLK) Growth
Tuesday, October 3, 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 Pfizer (PFE), AT&T (T) and BlackRock (BLK). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Shares of Buy-rated Pfizer have outperformed the peer group in the last three months (the stock is up +6.7% over this period vs. a +4.8% increase for the Zacks Large-Cap Pharmaceuticals industry). Pfizer is working on strengthening its product portfolio through acquisitions and licensing deals. However, Pfizer continues to face headwinds in the form of genericization of key drugs, lost alliance revenues, pricing pressure and rising competition which is hurting sales.
Though Pfizer’s growing immuno-oncology portfolio offers strong potential, many of these assets are in early stage of development. Nevertheless, the Zacks analyst believes that new products like Ibrance, contribution from acquisitions, cost-cutting efforts and share buybacks should help the company achieve its guidance.
Pfizer also boasts a strong pipeline and expects approximately 25 to 30 drug approvals over the next five years, including around 15 products that have blockbuster potential. Bavencio is being considered a key long-term growth driver for Pfizer. The company has a mixed record of earnings surprises in recent quarters. Estimates have remained stable ahead of its Q3 results.
AT&T’s shares increased +2.6% as against the Zacks Wireless National industry's gain of +3.8%, over the past three months. AT&T is planning to spread its 5G technology trials to three new cities: Waco, Kalamazoo and South Bend by 2017 end. Deployment of G.fast services complements its high-speed broadband business.
AT&T’s NetBond is gearing up to offer multiple cloud-to-cloud connections. The company is targeting customers by offering a combo of wireless and video services. Meanwhile, AT&T is reportedly exploring a strategic option to sell a major part of its Latin American pay-TV operations.
Further, AT&T has unveiled its own Android tablet, Primetime. The AT&T-Time Warner pending deal awaits approvals from Brazil and the United States. However, AT&T operates in a competitive and saturated wireless U.S. market. Losses in access lines, operating expenses, marketing costs associated with attractive discounts, regulatory norms and union issues are other major risks.
Buy-rated BlackRock’s shares have outperformed the Zacks Investment Management industry in the last six months, (+18.1% vs. +16.2%). The company surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters.
The company is undertaking initiatives to restructure its actively managed equities business with an aim to meet changing client needs. These along with technological changes will further help top-line growth going forward.
Also, it has expanded globally via acquisitions and remains well positioned to capitalize on opportunistic deals, given its strong liquidity position. However, mounting expenses mainly due to continued rise in marketing costs and high dependence on overseas revenues remain major concerns for the company.
Other noteworthy reports we are featuring today include U.S. Bancorp (USB), Walt Disney (DIS) and Statoil (STO).
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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>>>