Today's Must Read
Gilead (GILD) HIV Franchise Growth Offsets HCV Sales Decline
Goldman (GS) Exhibits Cost Control; Legal Issues Linger
Monday, July 9, 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 Mastercard (MA), Gilead (GILD) and Goldman Sachs (GS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-ranked Mastercard’s shares have increased 62.6% over the last year, significantly outperforming the Zacks Financial Transaction Services industry’s gain of 37.1% during the same period. The Zacks analyst thinks the company is well placed for growth, given its solid market position, ongoing expansion and digital initiatives plus significant opportunities from the secular shift toward electronic payments.
The buyouts of VocaLink and NuData Security complement the company’s efforts to participate in new payment flows and enhance its safety and security offerings. The stock has seen the Zacks Consensus Estimate for 2018 and 2019 earnings being revised upward over the last 60 days. However, escalating costs continue to bother. Also, higher incentives and rewards will put pressure on its bottom line.
Shares of Gilead have outperformed the Zacks Biotech industry year to date, gaining +5% vs. a decline of -3.7%. Gilead is now banking on its HIV franchise and newer avenues like the CAR-T therapy to drive growth. The HIV franchise maintains momentum driven by the rapid adoption of Descovy-based regimens.
The FDA approval of Biktarvy has further widened the portfolio. Biktarvy has also been approved in Europe which should boost sales further. The initial uptake of Yescarta is encouraging in the United States and the CHMP gave a positive opinion on the same. Meanwhile, Gilead is intending to foray into the NASH market with selonsertib and filgotinib. Both candidates are being evaluated in late stage studies and a tentative approval will diversify Gilead’s portfolio.
However, Gilead’s HCV franchise is under pressure due to competitive and pricing pressure. Pricing has largely stabilized and market share will stabilize by mid-2018, while patient starts are expected to decline further.
Goldman Sachs’ shares have lost -12.8% in the past six months, underperforming the -8.6% decline of the Zacks Investment Banking industry. However, the company boasts an impressive earnings surprise history. It surpassed expectations for earnings in all the trailing four quarters. Estimates have decreased slightly ahead of the company’s second quarter earnings release.
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. Further, its cost-control measures are commendable. Additionally, the company’s steady capital-deployment activities have boosted investors' confidence along with the Fed's approval to 2018 Capital Plan.
Other noteworthy reports we are featuring today include PepsiCo (PEP), EOG Resources (EOG) and Aetna (AET).
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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>>>