Today's Must Read
Medicare Business Aids Aetna (AET), Low Membership Hurts
21st Century Fox (FOXA) Rides on Cable Network Programming
Monday, December 4, 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 Alibaba (BABA), Aetna (AET) and 21st Century Fox (FOXA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-rated Alibaba’s shares have outperformed the Zacks Electronic Commerce industry, on a year-to-date basis, gaining +98.8% vs. +58.1%. Alibaba's solid growth in the company’s core e-commerce business, strong growth in metrics and international strength help it to generate significant revenues. Other drivers include strong mobile 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.
Shares of Aetna have outperformed the Zacks Health Maintenance Organization industry year to date, increasing +46.2% vs. a gain of +44.1%. The recent agreement on the acquisition of the company by CVS Health seems to be grand opportunity for the former. This is because this buyout is expected to aid Aetna to expand its scale and size, which in turn would help the company to negotiate with drug manufacturers and pharmacies in an improved manner.
The deal should bring significant earnings growth, which has been hurt by a number of headwinds. These headwinds include increase in medical benefit ratio, pressure on membership, Medicaid contract loss and exit of individual commercial business on public exchanges. Nevertheless, its strong capital position would enable share buybacks that should provide a cushion to the bottom line. Also, cost control efforts are anticipated to aid the margins.
21st Century Fox’s shares have increased +16.8% over the last year, outperforming the Zacks Film and Television industry, which has gained +15.1% over the same period. The company continues to impress investors with its positive earnings surprise for the sixth straight quarter, when it reported first-quarter fiscal 2018 results.
The quarter also marked its second successive revenue beat, wherein both the top and bottom line grew year over year. The company’s impressive performance was driven by robust affiliate revenues across the Cable Network Programming and Television segments. Higher content revenues at the Filmed Entertainment segment also contributed.
Despite these tailwinds, elevated programming costs remain a cause of concern. Increase in expenses may dent margins and in turn the bottom line. Further, the company’s proposed acquisition of remaining 61% stake in Sky plc hit a roadblock after U.K. Culture Secretary Karen Bradley demanded a detailed review from the Competition and Markets Authority.
Other noteworthy reports we are featuring today include Adobe (ADBE), Public Service Enterprise Group (PEG) and Pioneer Natural Resources (PXD).
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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>>>