Today's Must Read
FedEx (FDX) Buoyed by Volume Growth & New Tax Law
Thermo Fisher (TMO) Gains Space in CDMO with Patheon Buyout
Thursday, March 22, 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 Amgen (AMGN), FedEx (FDX) and Thermo Fisher (TMO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amgen’s shares have gained +9.4% over the past year, outperforming the Zacks Biomedical and Genetics industry, which has declined -3.3% over the same period. Amgen’s newer drugs – Prolia, Xgeva, Kyprolis – are performing well. Amgen is also progressing with its pipeline and expects approval and launch of migraine candidate, Aimovig this year.
Amgen’s restructuring plan is making it leaner and more cost efficient. Lower taxes and share buybacks should provide some bottom-line support in 2018. However, Amgen has some challenges in store, given slowdown in sales of mature drugs like Enbrel, Aranesp and Neulasta, which are facing an array of branded and generic competitors.
Volume growth of new drugs may not be enough to offset the lost sales due to the decline in mature brands. While Neupogen is already facing U.S. biosimilar competition, Neulasta, Epogen and Sensipar could start facing the same this year. Meanwhile, uptake of key new drug, Repatha has been slow due to payer restrictions.
Shares of Buy-rated FedEx have outperformed the Zacks Air Freight and Cargo industry and rival United Parcel Service in the last year. The company has gained +31.6% while the industry it belongs to and UPS have rallied +13% and +1.9%, respectively, in the same period.
Ushering in further good news, FedEx outperformed in the third quarter of fiscal 2018 driven by increased package volumes and higher base rates. The company's Ground unit performed very impressively in the quarter.
The Zacks analyst thinks strong e-commerce growth is a huge positive for the company. The new tax law is also encouraging. It was primarily responsible for the company's bullish earnings outlook for fiscal 2018.
Efforts to reward its shareholders through dividend payments and share buybacks are also noteworthy. An uptick in such shareholder-friendly activities cannot be ruled out, in the light of the savings induced by the Tax Cuts and Jobs Act. High costs are, however, hurting the bottom line.
Buy-rated Thermo Fisher’s shares have outperformed the Zacks Medical Instruments industry over the last three months (+11.9% vs. +9.8%). Post a promising fourth-quarter show by Thermo Fisher, the Zacks analyst is encouraged by the company’s solid international performance with strong growth in the Asia-Pacific and the emerging markets.
Also, a series of product launches along with major progress in precision medicine initiatives benefited the company’s performance. Thermo Fisher’s FEI acquisition has already started to boost analytical instruments portfolio. Also in 2017, the company deployed $7.8 billion on strategic acquisitions, adding leading biopharma contract development and manufacturing services through Patheon.
On the flip side, in the reported quarter, the company’s business segments were impacted by strategic investments and unfavorable business mix. Also, competitive headwinds and rising operating costs continue to pose a threat.
Other noteworthy reports we are featuring today include Ecolab (ECL), Sherwin-Williams (SHW) and Ameriprise Financial (AMP).
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
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>>>