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Research Daily

Friday, October 27, 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 Amgen (AMGN), Comcast (CMCSA) and McDonald's (MCD). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Buy-rated Amgen’s shares have gained +20.7% year to date, outperforming the Zacks Biomedical and Genetics industry, which has gained +3.7% over the same period. Amgen beat expectations for both earnings and sales in the third quarter of 2017 and raised its earnings guidance for 2017 supported by effective cost management.

Amgen’s newer drugs – Prolia, Xgeva, Vectibix, Nplate and Sensipar – are performing well. Amgen is also progressing with its pipeline including biosimilar drugs. Additionally, the Zacks analyst thinks Amgen’s restructuring plan is making it leaner and more cost efficient.

However, the company has some challenges in store, given the presence of biosimilar competition and slowdown in sales of mature drugs. While Neupogen is already facing U.S. biosimilar competition, Neulasta and Epogen could start facing the same next year.

Also the softness in Enbrel sales due to stiff competitive and pricing pressure is a key cause for concern. Meanwhile, uptake of key new drug Repatha has been slow due to payer restrictions.

(You can read the full research report on Amgen here >>>).

Shares of Comcast have lost -8.2% over the last three months, during which the Zacks Cable Television industry has declined -10.4%. Comcast posted mixed third-quarter 2017 financial results. Comcast completed the nationwide rollout of its wireless services under the Xfinity Mobile brand, with plans to include YouTube in its X1 video platform.

The company is venturing into residential solar programs with a 40-month deal with Sunrun. Comcast is working towards 5G network deployment and continues to roll out its DOCSIS 3.1-based internet services to Comcast Business customers. Comcast continues to expand its theme park business.

With this, Comcast aims to check customer churn and provide viewers with more streaming options. However, tough competition, consolidation-related woes, mounting programming costs, loss of customer base act as near-term risks for Comcast. Comcast lost 94,000 voice customers and 1,25,000 video customers in the third-quarter 2017 due to cord-cutting.

(You can read the full research report on Comcast here >>>).

McDonald's shares have gained +5.2% over the last three months, outperforming the Zacks Restaurants industry which has gained +2.6% over the same period. McDonald’s third-quarter adjusted earnings of $1.76 per share beat expectations and rose year over year. Total revenue declined year of year due to refranchising and lagged the consensus mark.

Meanwhile, Q3 marked the ninth consecutive quarter of global comps growth and third consecutive quarter of comparable guest count growth for McDonald’s. The Zacks analyst likes the fact that McDonald’s is trying to reinforce its position worldwide via various sales and digital initiatives. Also, increased focus on refranchising is expected to reduce its capital requirements, thereby facilitating EPS growth and ROE expansion in the long run.

Yet higher costs along with currency headwinds may hurt profits. Also, a soft industry backdrop in the United States and macroeconomic concerns in some parts of the world might limit sales growth.

(You can read the full research report on McDonald's here >>>).

Other noteworthy reports we are featuring today include Stryker (SYK), Waste Management (WM) and BB&T (BBT).

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

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Mark Vickery

Senior Editor

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>>>

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