Today's Must Read
HIV Franchise, Yescarta Drive Growth for Gilead (GILD)
E-Commerce, Dividends & Buybacks Aid FedEx (FDX), Costs Ail
Friday, September 7, 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 Abbott (ABT), Gilead (GILD) and FedEx (FDX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Abbott’s shares have gained +26.5% over the past year, outperforming the Zacks Medical Products industry, which has gained +18.7% over the same period. The Zacks analyst likes the strong and consistent performance across all segments by Abbott in the last reported quarter.
Within Structural Heart, worldwide strong uptake of MitraClip therapy improves further following the recent FDA approval of its next-generation version. This apart, synergies from Alere consolidation in the form of revenues from Rapid Diagnostics have been driving growth.
Meanwhile, emerging market performance has been extremely promising. The company has been hogging the limelight within Diabetic Care on progress with its FreeStyle Libre. On the flip side, sluggish Vascular business continues to dent growth. However, the FDA approval for XIENCE Sierra coronary stent system as well as a reimbursement approval in Japan should help Abbott to revive the dull Vascular business.
Shares of Strong Buy-ranked Gilead have outperformed the Zacks Biotech industry year to date, gaining +1.7% vs. a decline of -4.9%. The Zacks analyst thinks Gilead’s 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 launch of Yescarta is progressing well in the United States and the approval in Europe will further boost sales.
Meanwhile, Gilead is intending to foray into the nonalcoholic steatohepatitis (NASH) and inflammation market with late-stage candidates, selonsertib and filgotinib, respectively. A tentative approval will diversify Gilead’s portfolio. However, Gilead’s HCV franchise is under pressure due to competitive and pricing pressure. The departure of the CEO at this crucial time further clouds the growth prospects of the company.
FedEx’s shares have outperformed the Zacks Air Freight and Cargo industry (+16.9% vs. +10.2%) and rival United Parcel Service (+7.6%) in the past year. The Zacks analyst thinks a buoyant U.S. economy and e-commerce growth has been aiding the company.
Additionally, higher shipping rates and volume growth are huge positives for FedEx. Meanwhile, lower tax rates are boosting the company’s bottom-line performance. FedEx’s decision to reward its shareholders through dividend payments and share buybacks is impressive. However, high costs are hurting the bottom line.
Significant investments at the company's key divisions are pushing up costs as well. Capital expenses are estimated at $5.6 billion for fiscal 2019. Trade-war related fears are also weighing on FedEx.
Other noteworthy reports we are featuring today include Archer Daniels (ADM), Omnicom (OMC) and CBRE Group (CBRE).
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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>>>