Today's Must Read
Celgene's (CELG) Portfolio Exhibits Growth Amid Competition
Procter & Gamble's (PG) Cost Saving Plan Fights Sales Slump
Wednesday, October 18, 2017
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including IBM Corp (IBM), Celgene (CELG) and Procter & Gamble (PG). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
IBM Corp’s shares have underperformed the broader market on a year to date basis, losing -9.2% vs. the S&P 500’s +16.4% gain. IBM’s third-quarter results benefited from higher cognitive solutions and systems revenues.
Cognitive revenues grew on strong demand for security, IoT and analytics offerings. The new z14 mainframe product drove systems revenues. IBM expects strong revenue growth in the fourth quarter on a sequential basis, driven by an anticipated solid demand for the z14 mainframe.
The Zacks analyst likes the company’s continuing strength in cloud, mobile, security and analytics as well as its cost savings actions and expects these factors to drive profitability. The company’s expanding footprint in the rapidly growing blockchain market is another positive. Continuing share buyback and dividend payout are major attractions for investors. However, intensifying competition in most of the markets is a major concern.
Shares of Celgene have outperformed the Zacks Biomedical and Genetics industry in the year so far, gaining +20% vs. +14.7%. 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.
Procter & Gamble’s shares have underperformed the Zacks Soap and Cleaning Materials industry so far this year (+13% vs. +23.5%). But the Zacks analyst likes the company’s 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. However, slowing market growth, weak volumes and major foreign exchange headwinds have been hurting sales. Soft consumer-spending environment in developed markets and uncertainties in emerging countries also add to the worries.
That said, P&G 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.
Other noteworthy reports we are featuring today include Valero (VLO), Gilead (GILD) and Sprint (S).
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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>>>