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Research Daily

Monday, September 10, 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 Berkshire Hathaway (BRK.B), Coca-Cola (KO) and Disney (DIS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Buy-ranked Berkshire Hathaway’s shares have outperformed the Zacks Insurance - Property and Casualty industry over the past year (+20.3% vs. +16.9%). The Zacks analyst thinks Berkshire Hathaway’s inorganic growth story remains impressive with strategic acquisitions. A strong cash position allows it to make earnings-accretive bolt-on buyouts. 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 to be $10 billion in 2018.

(You can read the full research report on Berkshire Hathaway here >>>).

Shares of Coca-Cola have outperformed the Zacks Soft Drinks Beverages industry in the past year, (-1.7% vs. -6.2%), driven by a solid earnings trend with beat recorded in the last five quarters. The Zacks analyst thinks the company gains from the effective execution of strategies to evolve as a consumer-centric, total beverage company.

Further, the acceleration of its sparkling soft drinks category through investment and innovation bodes well. Though Coca-Cola reported top and bottom line beat in second-quarter 2018, reported revenues and operating margins were hurt by new accounting standards and negative currency.

Going forward, the company expects unfavorable currency to hurt both revenues and operating margin in the second half. Further, the company anticipates the Trump administration’s recent tariffs on aluminum to increase the cost of producing soda cans. This along with escalating freight costs and higher in other input costs is likely to result in increased prices for sodas, which should hurt profitability.

(You can read the full research report on Coca-Cola here >>>).

Disney’s shares have increased +3.3% year to date, outperforming the Zacks Media Conglomerates industry’s +2.3% gain in that same time period. The Zacks analyst thinks Disney’s top-line will benefit from the impressive line-up of big budget movies slated to be released over the next 18 months. Parks & Resorts segment is also expected to gain from significant visitor growth and increased per capita spending.

The pending acquisition of Fox will boost international presence as well as content portfolio. However, Disney’s ongoing investments on its technology platform are expected to keep margins under pressure. Additionally, higher programming costs at ESPN remains a concern. Moreover, weakness in the Consumer Products & Interactive Media segment is a headwind.

(You can read the full research report on Disney here >>>).

Other noteworthy reports we are featuring today include PetroChina (PTR), BHP Billiton (BHP) and Zoetis (ZTS).

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Mark Vickery
Senior Editor

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>>>

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