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Research Daily

Friday, November 2, 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 Verizon (VZ), Express Scripts (ESRX), and Cigna (CI). 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 >>>

Verizon’s shares have gained +18.2% over the past year, outperforming the Zacks Wireless National industry’s increase of +4.8% during the same period. Verizon recorded solid performance in third-quarter 2018, with healthy year-over-year growth in revenues and adjusted earnings that beat their respective expectations.

The Zacks analyst thinks the company remains poised to benefit from the upcoming 5G boom, led by healthy traction in the wireless business. Focus on online content delivery, mobile video and online advertising should also drive growth. However, the company continues to struggle in a highly competitive and saturated wireless market, where spectrum crunch has become a major issue, reducing its profitability to some extent.

Verizon continues to face softer wireline revenues and margins due to technology shifts and ongoing secular pressures from legacy technologies. In an effort to expand its customer base, Verizon is spending heavily on promotion and is also offering lucrative discounts, which is further weighing on margins.

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

Shares of Buy-rated Express Scripts have outperformed the Zacks Medical Services industry over the past year, gaining +60.6% vs. +33.9%. Express Scripts ended the third quarter on a solid note, beating both earnings and revenue expectations.

The Zacks analyst thinks the company has been gaining from the strong performance by the core PBM unit. Further, recently-acquired complementary medical-benefit solutions from eviCore is likely to build a comprehensive PBM solution worldwide. Developments in the company’s Inside Rx program buoy optimism.

However, Express Scripts currently faces persistent drug pricing issues. The company is also getting acquired by Cigna by December 2018. Express Scripts announced that its biggest customer and leading health insurer Anthem is not likely to extend the PBM agreement with the company anymore.

Furthermore, the company has currently suspended share repurchase program because of the merger agreement with Cigna. Express Scripts has not provided any guidance for 2018.

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

Strong Buy-rated Cigna’s shares have gained +7.1% over the past year, outperforming the Zacks Multi-Line Insurance industry, which has declined -13.9% over the same period. Cigna’s third-quarter earnings beat expectations and increased year over year. Strong performance across the company’s Global Health Care, Global Supplemental Benefits and Group Disability and Life businesses aided earnings.

The Zacks analyst emphasizes that the company is on track to buy Express Scripts, which should raise its rank in the health insurance industry and lead to long-term growth. The company has received approval for the merger from the Department of Justice. A robust Global Supplemental business, growing Government business, increasing membership, and strong capital position are other positives.

A strong 2018 outlook reflects business strength.  However, the increase in leverage, rise in operating expenses and suspension of share buyback are concerns.

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

Other noteworthy reports we are featuring today include Ecolab (ECL), Fidelity National Information Services (FIS) and eBay (EBAY).

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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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