Today's Must Read
Qualcomm (QCOM) Products Drive Wireless Ecosystem Innovation
Focus on Core Operations Aid Citigroup (C), Legal Woes Linger
Thursday, August 31, 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 Bristol-Myers Squibb (BMY), Qualcomm (QCOM) and Citigroup (C). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Shares of buy-rated Bristol-Myers have underperformed the Zacks Large Cap Pharmaceuticals industry in the last six months, losing -7.6% vs. a gain of -7.9%. However, Bristol-Myers' blockbuster immuno-oncology drug Opdivo continues to maintain momentum.
Opdivo’s performance is being boosted by the uptake in new indications, first line renal cell and adjuvant melanoma. Several label expansion applications for Opdivo are under review in the United States and Europe. The drug was recently approved for small cell lung cancer in the United States and melanoma in Europe.
Potential approval in other indications will further boost the prospects of this blockbuster drug. Eliquis is expected to drive further growth in 2018 driven by increases in market share in the novel oral anticoagulant (NOAC) market.
The label expansion of other drugs like Sprycel and Empliciti also bode well for the company. However, pricing concerns, stiff competition in the immuno-oncology space are expected to remain an overhang.
Buy-rated Qualcomm’s shares have gained +30.9% over the past one year vs +23.8% for the Zacks Wireless Equipment industry as it remains focused on $1 billion cost-cut plan. Qualcomm has been trying to retain its leadership in 5G, chipset market and mobile connectivity with multiple technological achievements and innovative product launches.
The company’s improved and upgraded technologies will likely enable various firms to build new and updated products and services across the wireless ecosystem to better serve customers. Qualcomm aborted the proposed acquisition of NXP Semiconductors as it failed to get the anti-trust approval from China, thereby eliminating the uncertainty with the deal stuck in red tape for 21 months.
This is likely to pave the path for focused organic growth of the company. However, regulatory disputes and aggressive competition in the mobile phone chipset market continue to hurt Qualcomm. Headwinds from weaker industry conditions have further dented margins.
Shares of Citigroup have underperformed the Zacks Banks - Major Regional industry over the last six months (-3% vs. 1.2%). Yet, the company possesses an impressive earnings surprise history, beating the Zacks Consensus Estimate in all the trailing four quarters.
The Zacks analyst believes the company’s restructuring and streamlining efforts, strategic investments in core business, lower tax rate and expense management will likely support profitability. Recently, the capital plan approval reflects strong capital position.
Yet, several issues, including litigation burden, keep the analyst apprehensive. Also, despite rising rates, margin remains under pressure, due to persistent decline in the company’s legacy holdings portfolio.
Other noteworthy reports we are featuring today include Phillips 66 (PSX), Diageo (DEO) and Anthem (ANTM).
5 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2018 looks to be a pivotal year to get in on another emerging technology expected to rock the market.
Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 5 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.
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>>>