Today's Must Read
Abbott (ABT) EPD Gains in Emerging Space on Branded Generics
Soft Cigarette Volumes Mar Altria (MO), Smokeless Unit Solid
Friday, April 20, 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 Goldman Sachs (GS), Abbott Labs (ABT) and Altria (MO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Strong Buy-ranked Goldman Sachs’ shares have gained +5% in the past six months, underperforming the +13.1% gain of the Zacks Investment Banking industry. However, the company boasts an impressive earnings surprise history. It surpassed the Zacks Consensus Estimate for earnings in all the trailing four quarters.
The company’s first-quarter 2018 results witnessed top-line strength. Strong trading activities on high volatility supported the bottom-line numbers. Though regulatory issues are concerns, the Zacks analyst thinks the company’s well-diversified business and focus to capitalize on growth opportunities through strategic moves will continue to strengthen the overall business.
Its cost-control measures are commendable. Additionally, the company’s steady capital-deployment activities have boosted investors' confidence.
Shares of Buy-ranked Abbott Labs have gained +6.8% over the last six months, outperforming the Zacks Medical Products industry, which has gained +2.8% over the same period. Post a better-than-expected result by Abbott in the first quarter 2018; the Zacks analyst is upbeat about the strong and consistent EPD and Medical Devices performance by the company. Also, solid contributions from Diagnostics and Nutrition business are encouraging.
Within Structural Heart, strong uptake of MitraClip therapy post the national reimbursement approval in Japan also buoys optimism. Abbott continues to benefit from a strong integration synergy of St. Jude Medical. Abbott’s Alere buyout is another positive. Synergies from this consolidation in the form of revenues from Rapid Diagnostics have been driving the company’s growth.
Meanwhile, the company’s emerging market performance has been extremely promising on several strategic developments. On the flip side, sluggish pediatric vascular business in the United States continues to dent growth.
Altria’s shares have outperformed the Zacks Tobacco industry in the last three months (-18.9% vs. -21.8%), aided by expansion in the smokeless products category. Rising health consciousness and stern government regulations to curb tobacco consumption has been hurting cigarette volumes and denting Altria’s top line for quite some time. Also, the likelihood of these concerns lingering is evident from investors' bearish stance on the stock. Moreover, Altria's Wine category remains sluggish due to stiff competition.
Nevertheless, Altria has been progressing well with expansion in the smokeless products category. This fueled its smokeless product revenue in fourth-quarter 2017, wherein earnings kept its stellar year-over-year growth trend intact. Results were backed by solid pricing, higher OCI and lower tax rates.
Investments in key growth areas, efforts to lift Marlboro’s share and expected gains from tax reforms led to a robust earnings view. However, estimates have dropped lately ahead of Altria's earnings release.
Other noteworthy reports we are featuring today include PayPal (PYPL), Kinder Morgan (KMI) and Progressive Corp (PGR).
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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>>>