Today's Must Read
Rite Aid Store Buy, GuoDa Deal Aid Walgreens (WBA)
EOG Resources (EOG) to Gain From Oil-Rich Eagle Ford Acreage
Wednesday, January 9, 2018
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 PepsiCo (PEP), Walgreens Boots (WBA) and EOG Resources (EOG). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
PepsiCo’s shares have gained +15.7% year to date, underperforming the Zacks Soft Beverages industry, which has increased +17.4% over the same period. However, PepsiCo has been doing well on the back of significant innovation, continued momentum in Frito-Lay business, revenue management strategies, improved productivity and cost-saving initiatives, along with better market execution.
Moreover, an improving economy, better industry pricing dynamics and a consistency in positive innovation bode well. It rolled out several products recently which management believes will drive sales and profits in 2018.
That said, growing health awareness has been hurting the CSD category, resulting in a 4% volume decline in the first nine months of 2017 in North America. Again, rising volatility in global markets and increasing currency headwinds may dampen growth.
Shares of Buy-rated Walgreens Boots have done better than the embattled Zacks Drug Stores industry over the last year (WBA is down -10.7% vs. decline of -12.3% for the peer group). Walgreens Boots reported an impressive first quarter of fiscal 2018. The increase in sales at the Retail Pharmacy International is a major positive.
Moreover, Walgreens Boots has been gaining on account of strategic tie-ups, which brought more patients to its U.S. pharmacies. The Zacks analyst likes the Rite Aid stores acquisition deal for which the company got regulatory approval recently. Also, the company is expanding its global footprint with its decision to acquire a 40% stake in Sinopharm Holding Guoda Drugstores in China which should provide a strong impetus to Walgreens Boots’ worldwide retail pharmacy business.
On the flip side, declining sales at the Retail Pharmacy was a disappointment. The company faces tough competition along with currency fluctuations. Also, slowdown in generic introduction continues to weigh on margins.
Buy-rated EOG Resources’ shares have gained around +9% over the last one year, outperforming the Zacks Oil & Gas E&P Industry, which has declines -11.1% over the same period. EOG Resources holds premium acreages in the Permian, Bakken and Eagle Ford oil shale plays in the United States.
The Zacks analyst likes the firm’s plan to complete 505 wells in the resources in 2017, significantly higher than 443 recorded in 2016. Notably, during 2016, almost 50% of the wells drilled by the firm met the standard of premium wells. The company expected 80% and 90% of the wells to meet the standards in 2017 and 2018, respectively.
In the promising U.S. shale plays, EOG Resources has identified 8,000 premium wells that can give access to almost 7.3 billion barrels of oil equivalent estimated potential reserves over a period of 10 years. The upstream energy player’s pricing chart history is also impressive.
Other noteworthy reports we are featuring today include Ford (F), Praxair (PX) and Analog Devices (ADI).
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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>>>