Today's Must Read
Rising Expenses Weigh on Alibaba's (BABA) New Retail Push
Three New Products Strengthen Glaxo's (GSK) Portfolio
Friday, November 24, 2017
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 11 major stocks, including Union Pacific (UNP), Alibaba (BABA) and GlaxoSmithKline (GSK). 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 >>>
Union Pacific’s shares have outperformed its industry as well as fellow railroad operator Kansas City Southern over the last three months. While the company gained +12%, the industry it belongs to and Kansas City Southern have rallied +7.2% and 1.5%, respectively, in the same period. Ushering in further good news, the company's board of directors approved a 10% hike in its quarterly dividend payout in November, 2017.
Also, Union Pacific’s efforts to cut costs to drive its bottom line are impressive. Strong performances of the company's intermodal and industrial products units, so far this year, also raise optimism in the stock. However, the company's high debt levels are a potent threat. Declining automotive volumes due to sluggish vehicle production in the United States are added concerns.
Shares of Alibaba have outperformed the Zacks Electronic Commerce industry, on a year-to-date basis, gaining +116.2% vs. +63.6%. The company has delivered strong fiscal second-quarter results driven by robust growth in core e-commerce business. Other drivers include strong mobile and international strength.
The Zacks analyst likes Alibaba’s strong core e-commerce business, its continued efforts to develop new products, international growth opportunities, strong financial position and growing cloud computing services. However, macro headwinds, continued investments and increasing competition from Tencent Holdings and Baidu remain the overhangs.
GlaxoSmithKline's shares have underperformed the Zacks Large Cap Pharmaceuticals industry over the year-to-date period, losing -9% versus the industry’s +14.8% increase. Glaxo should continue to see strong performance in its Pharmaceuticals and Vaccines units. The Zacks analyst likes the company’s efforts to develop its pipeline.
Performance of new products has been encouraging. Recent FDA approval for two key pipeline candidates -- Shingrix and Trelegy Ellipta -- was a major boost. However, persistent challenges like stiff competition, genericization and pricing pressure have been impacting the company’s performance. In particular, pricing dynamics and competitive pressure are hurting sales of its top-selling drug Advair.
Meanwhile, Advair is expected to face generic competition next year, which will further hurt sales. The slowdown in sales of the Consumer Healthcare unit this year is also a concern. Estimate movement has been mixed ahead of Q3 earnings release. The company has a positive record of earnings surprises in recent quarters.
Other noteworthy reports we are featuring today include eBay (EBAY), Public Storage (PSA) and Welltower (HCN).
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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>>>