Today's Must Read
Caterpillar (CAT) Rides on Buoyant Global Demand, Cost Cuts
Subscriber Gains, Wireless Initiatives Benefit Charter (CHTR)
Wednesday, October 17, 2018
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Pfizer (PFE), Caterpillar (CAT) and Charter Communications (CHTR). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Pfizer’s shares have outperformed its peer group year-to-date (the stock is up +19% over this period vs. a +3.2% increase for the Zacks Large-Cap Pharmaceuticals industry). Pfizer is facing top-line headwinds in the form of genericization of key drugs, supply challenges in the legacy Hospira portfolio, pricing pressure and rising competition.
Nevertheless, the Zacks analyst thinks new products like Ibrance, contribution from acquisitions, cost-cutting efforts, a lower tax rate and share buybacks should help the company achieve its guidance. Pfizer also boasts a strong pipeline and expects approximately 25 to 30 drug approvals through 2022, including around 15 products that have blockbuster potential.
Pfizer’s growing immuno-oncology portfolio has strong potential. Bavencio is being considered a key long-term growth driver for Pfizer. In oncology, Pfizer has three potential medicines under FDA’s priority review. Estimates have remained stable ahead of its Q3 earnings release and Pfizer has a positive record of earnings surprises in recent quarters.
Shares of Strong Buy-ranked Caterpillar have outperformed the Zacks Construction and Mining industry over the past year, gaining +8.6% vs. +7.7%. Backed by strong order rates, increasing backlog, Caterpillar guides adjusted EPS at $11.00-$12.00 for 2018, reflecting year-over-year growth of 67% at the mid-point.
The Zacks analyst thinks Construction is likely to benefit from infrastructure development in China and continued improvement in North American residential, non-residential and infrastructure markets. Rising commodity prices and improved miners' profitability is likely to drive revenues for the Resource Industries segment.
Cost-cutting efforts and additional investments in expanded offerings and services, digital initiatives like e-commerce will also drive growth. Its estimates have also gone up lately. Further, the company has a positive record of earnings surprises over the past few quarters.
Charter Communications’ shares have outperformed the Zacks Cable TV industry year to date (-6.6% vs. -13.7%). The Zacks analyst thinks Charter is benefiting from subscriber growth in residential and commercial internet and voice segment. The partnership with Comcast to develop back-end software to support services for Xfinity mobile offering is a major positive. The collaboration will help in saving costs.
Moreover, the launch of Spectrum Mobile service under mobile virtual network operator (MVNO) reseller agreement with Verizon is another positive for the company. Meanwhile, estimates have been stable lately ahead of the company’s Q3 earnings release.
The company has a mixed record of earnings surprises in recent quarters. Charter continues to struggle due to a saturated and competitive multi-channel U.S. video market. The company is also facing stiff competition from online TV streaming service providers that is hurting top-line growth.
Other noteworthy reports we are featuring today include Zoetis (ZTS), Sherwin-Williams (SHW) and Pioneer Natural Resources (PXD).
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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>>>