Today's Must Read
Steadying CRHF, Growing Neurovascular to Aid Medtronic (MDT)
HIV Business Boosts Gilead (GILD) Amid Decline in HCV Sales
Monday, April 2, 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 United Technologies (UTX), Medtronic (MDT) and Gilead (GILD). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
United Technologies’ shares have gained +6.9% in the last six months, outperforming the Zacks Diversified Operations industry, which has lost -12.8% over the same period. United Technologies serves various end-markets, which allows it to remain profitable even during tough economic times. The company has offered a bullish guidance for 2018 on healthy demand trends and is likely to deliver sustainable earnings growth in future with Rockwell merger.
United Technologies remains focused on four key priorities: flawless execution, innovation, structural cost reduction and disciplined capital allocation to fuel its growth engine. However, macroeconomic conditions and fluctuations in foreign currency exchange rates affect the company’s bottom-line growth. A disruption in deliveries from suppliers, capacity constraints, production disruptions, price changes, or decreased availability of raw materials or commodities is likely to have an adverse effect on its ability to meet delivery schedules, thereby increasing its operating costs.
Shares of Medtronic have underperformed the Zacks Medical Products industry in the last three months, losing -4.4% vs. a -0.4% decline. However, Medtronic exited the fiscal third quarter on a solid note. All the major business groups contributed to solid top-line growth at CER, highlighting sustainability across groups and regions, in addition to displaying successful integration and achievement of synergy targets.
Also, gradually stabilizing CRHF market buoys optimism. The Zacks analyst is encouraged by the company’s healthy global acceptance of its advanced therapies. The receipt of FDA approval for the Riptide Aspiration System under the Neurovascular unit within the RTG business buoys optimism.
The company is also focusing on geographical diversification of its businesses. However, escalating costs and expenses continue to weigh on the bottom line. The company’s reiteration of 2018 guidance despite the projection of favorable foreign currency translation dampens investors’ confidence.
Gilead’s shares have outperformed the Zacks Biotech industry in the last twelve months, increasing +12.3% vs. a decline of -5.1%. Gilead’s HIV franchise continues to gain traction, courtesy of the rapid adoption of TAF-based regimens in the United States and EU. The TAF-based regimens now represent 62% of total HIV prescription volume following the launch of Genvoya, Odefsey and Descovy in 2016.
The Zacks analyst thinks the approval of Gilead’s latest triple HIV therapy, Biktarvy, will likely provide an impetus to the stock as Gilead is now banking on its HIV franchise and newer avenues like the CAR-T therapy. However, the HCV franchise is under tremendous pressure due to lower patient starts and increasing competition. Both pricing and market share are expected to stabilize by mid-2018 while patient starts are expected to decline further. The company’s guidance for 2018 also lacks luster.
Other noteworthy reports we are featuring today include Hewlett Packard (HPE), Air Products (APD) and Yum! Brands (YUM).
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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>>>