Today's Must Read
Hebron Field Aids ExxonMobil (XOM), Turnaround Activity Ails
Berkshire Hathaway (BRK.B) to Gain from Railroad Business
Wednesday, August 1, 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 Celgene (CELG), Exxon Mobil (XOM) and Berkshire Hathaway (BRK.B). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-ranked Celgene’s shares have underperformed the Zacks Biomedical and Genetics industry in the last three months, gaining +3.6% vs. +10.0%. Celgene’s second-quarter results were impressive as the company beat on both sales and earnings. Revlimid sales were impressive yet again, along with Pomalyst and Otezla.
The increase in annual guidance on the back of Revlimid sales should boost investors’ sentiment, given the recent spate of pipeline setbacks. The company is focused on the next cycle of innovation with five late stage candidates. In a bid to revive its pipeline, Celgene acquired Juno Therapeutics and added JCAR017 to its lymphoma pipeline.
Celgene expects to submit its NDA for fedratinib in myelofibrosis by the end of 2018. The company remains on track with submissions for ozanimod, both in the United States and EU, for relapsing multiple sclerosis in the first quarter of 2019.
Shares of Exxon Mobil have gained +6.1% in the last three months, outperforming the Zacks Oil and Gas - Integrated industry, which gained +2.0% over the same period. The company has a leading position in the energy industry owing to the size and diversity of its asset base, both in terms of business mix and geographical footprint.
With a stable cash position, the company’s balance sheet is one of the best in the industry. This has allowed ExxonMobil to reward stockholders with a 6.3% average annual dividend hike over the past 35 years. The company owns some of the most prolific upstream assets globally along with the largest global refining operations.
Notably, ExxonMobil continues to gain on ramped-up oil-equivalent production from Hebron field. However, significant turnaround activities, hurting throughput volumes, led to lower-than-expected results in the second quarter. Moreover, ExxonMobil’s exit from a joint venture in Russia could limit the company’s upside.
Buy-ranked Berkshire Hathaway’s shares have outperformed the Zacks Insurance - Property and Casualty industry over the past year (+11.2% vs. 8.9%). Berkshire’s inorganic growth 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 an 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 $10 billion in 2018.
Other noteworthy reports we are featuring today include International Paper (IP), Phillips 66 (PSX) and VMware (VMW).
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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>>>