Today's Must Read
Berkshire Hathaway (BRK.B) to Gain from Railroad Business
PepsiCo (PEP) to Gain from Productivity Plans Amid Weak Sales
Tuesday, April 17, 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 AbbVie (ABBV), Berkshire Hathaway (BRK.B) and PepsiCo (PEP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Shares of AbbVie have gained +45.5% in the past one year, outperforming the Zacks Large Cap Pharmaceuticals industry, which has gained +8.7% over the same period. AbbVie’s key drug Humira has been performing well based on strong demand trends, despite new competition.
Moreover, Imbruvica has multibillion dollar potential and AbbVie is exploring the possibility of label expansion into solid tumors and autoimmune diseases. AbbVie’s share performance is supported by a series of positive news including promising data from several pivotal studies, regulatory approvals, including its competitive HCV medicine Mavyret and two approvals for Imbruvica and settlement of its Humira patent disputes with Amgen.
In fact, Mavyret has become a major growth driver for AbbVie in a short time on the market. Also, several pivotal data readouts and regulatory milestones are expected in 2018. However, Viekira’s sales continue to be hurt by intensifying competition.
Buy-rated Berkshire Hathaway’s shares have gained +21.1% in the last year, outperforming the Zacks Property and Casualty Insurance industry which increased +17.4% during the same period. Berkshire’s inorganic story remains impressive with strategic acquisitions. A strong cash position allows it to make earnings-accretive bolt-on acquisitions.
Demand for utilities is expected to rise in the future and drive earnings growth. Continued insurance business growth also fuels increase in float. A sturdy capital level further adds impetus to the company. The insurance business generates maximum return on equity but its exposure to catastrophe loss remains a concern.
Huge capital expenses due to railroad operations also emerge as headwinds. Capital expenditure is estimated at $9.7 billion in 2019. The stock has seen the Zacks Consensus Estimate for 2018 and 2019 earnings moving north in the last 60 days.
PepsiCo’s shares have decreased -8.4% year to date, underperforming the Zacks Soft Beverages industry, which has declined -3.6% over the same period. Growing health awareness has been hurting the CSD category of the company, resulting in a 5% volume decline in 2017 in North America. Earnings estimates have moved 0.2% up for 2018 but 0.2% down for 2019, over the last 30 days.
Meanwhile, 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.
Other noteworthy reports we are featuring today include BP (BP), Sanofi (SNY) and Twenty-First Century Fox (FOXA).
Breaking News: Cryptocurrencies Now Bigger than Visa
The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.
Zacks’ has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.
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>>>