Today's Must Read
TJX Companies (TJX) Margins to Gain from Inventory Management
Increasing Membership, Strong Balance Sheet Aids Cigna (CI)
Friday, February 16, 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 Novo Nordisk (NVO), TJX Companies (TJX) and Cigna (CI). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-rated Novo Nordisk's shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the last one year (up +45.4% vs. +11.8%). Novo Nordisk’s fourth-quarter 2017 results missed earnings, but beat on revenue estimates. The company's Diabetes segment is driven by strong performance of drugs like Victoza, Tresiba, Saxenda and Xultophy among others.
In December 2017, the company received approval for Ozempic (semaglutide) for the treatment of type II diabetes, which was an important approval for the company. However, the Zacks analyst thinks continued growth from Victoza and Tresiba as well as higher contributions from Saxenda and Xultophy will be partly offset by the impact of lower realized prices in the United States, loss of exclusivity for products in hormone replacement therapy, intensifying competition within the diabetes and biopharmaceutical markets and macroeconomic conditions in many markets under International Operations.
Shares of Strong Buy-rated TJX Companies have underperformed the Zacks Discount Stores industry over the last six months, gaining +11% vs a +27.1% increase. TJX Companies has been recording year-over-year growth in both top and bottom lines for a while now, thanks to robust consumer traffic and strength in merchandise margins.
The Zacks analyst likes its focus on store expansions, e-commerce efforts, solid merchandise mix and other sales driving initiatives. These factors, were primarily responsible for strong third-quarter results. Further, its strong merchandise margins reflect its focus on inventory management.
However, TJX Companies has been witnessing high wage costs for quite some time now. Unfortunately, management expects this to linger and hurt earnings growth by 2% in fiscal 2018. Nevertheless, management stated that it began the fourth quarter on a strong note, with its solid inventory position keeping it well placed for the holiday season.
Buy-rated Cigna’s shares have gained +33.7% over the last one year, outperforming the Zacks Multi-Line Insurance industry, which is up +5.9% over the same period. Cigna’s fourth-quarter 2017 earnings beat expectations by 3.7% and grew by the same magnitude year over year on strong contribution from its Global Supplemental Benefits segment.
The company is poised for long-term growth on the back of its robust Global Supplemental business, growing Government business and increasing membership. A strong capital position and resumption of share buyback are the other positives. A strong outlook for 2018 reflects its business strength.
Also, the Zacks Consensus Estimate for 2018 moved up 8.4%, in the last 30 days. Cigna is engaged in a legal tussle with Anthem and thus termination fee and other charges that it was to receive from the latter remain uncertain. Increase in benefits and expenses continue to remain a concern.
Other noteworthy reports we are featuring today include Regeneron (REGN), Williams (WMB) and ArcelorMittal (MT).
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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>>>