Today's Must Read
Rising Healthcare Spending, Buyouts to Drive Danaher (DHR)
Biogen's (BIIB) Spinraza Shines, Core Competition Heats Up
Wednesday, April 11, 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 NextEra (NEE), Danaher (DHR) and Biogen (BIIB). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-ranked NextEra’s shares have outperformed the Zacks Electric Power industry over the last year (the stock is up +23.9% vs. -3.3% decline for the industry). NextEra Energy’s investment to strengthen its infrastructure and ongoing capital projects, when completed, will help it serve its expanding customer base more efficiently.
The Zacks analyst likes the company’s focus on clean energy, which has helped it lower emission levels and its use of new technology, which has saved on energy bills for its customers. The natural gas pipelines, which came online in first half of 2017, are expected to boost its performance.
However, the company’s nature of business is subject to complex and comprehensive federal, state and other regulations. Despite investments made to strengthen its infrastructure the unpredictable nature of natural disaster could derail normal operation and impact profitability.
Shares of Buy-ranked Danaher have gained +14.4% over the past six months, outperforming the Zacks Diversified Operations industry, which has declined -11.9% over the same period. Danaher has an excellent earnings history over the trailing four quarters, beating estimates all through.
The Zacks analyst is optimistic about the company’s core revenue and earnings growth, on the back of improving order trends and rising healthcare spending. Its recent acquisitions – Pall and Cepheid – are proving to be strong profit churners, and will boost top-line growth as they become a part of the company’s core revenues.
This apart, the company’s continuous introduction of products enables it to penetrate new markets and gain competitive edge in existing ones. However, slowdown in the company’s academic business in Europe and prolonged sluggishness in the Dental business might restrict growth, going forward. Moreover, weakness in industrial markets and stiff competition may also hurt the company's financials.
Biogen’s shares have underperformed the Zacks Biomedical and Genetics industry over the last three months (-21% vs. -9.8%). Biogen has a strong position in the MS market. The Zacks analyst also likes Biogen’s efforts to diversify beyond MS to other areas like Alzheimer’s, Parkinson's and stroke, among others.
Meanwhile, its newest drug Spinraza witnessed strong patient uptake in the U.S. and internationally. However, weakening MS trends is a concern. Tecfidera is witnessing a slight decline in U.S. patient demand due to increasing competition from oral medicines and a slowdown in the overall MS market.
The launch of Ocrevus by Roche is beginning to have a negative impact on MS franchise sales in the U.S., mainly on Tysabri. Also, recently, Biogen announced the decision to withdraw Zinbryta from the markets due to growing safety concerns. However, estimates have risen ahead of Q1 earnings results. The company has a positive record of earnings surprises in recent quarters.
Other noteworthy reports we are featuring today include Royal Caribbean (RCL), Facebook (FB) and Apple (AAPL).
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>>>