Today's Must Read
Product and Service Lines to Aid Intercontinental (ICE)
Contribution from Startups, Investments Drive TOTAL (TOT)
Tuesday, November 6, 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 Amgen (AMGN), Intercontinental Exchange (ICE) and TOTAL S.A. (TOT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amgen’s shares have gained +9.2% year to date versus the Zacks Biomedical and Genetics industry's decline of -16.6%. Amgen beat expectations for both earnings and sales in the third quarter of 2018 and also raised full-year expectations for both.
The Zacks analyst emphasizes that Amgen’s newer drugs – Prolia, Xgeva, Blincyto, Repatha, Kyprolis – are performing well. Amgen is also progressing with its pipeline and the recent approval of migraine candidate, Aimovig was a huge boost. Amgen has a strong biosimilars pipeline, which could be an important long-term growth driver.
However, Amgen faces challenges related to more mature products such as launch of competing biosimilar versions of Neulasta and Epogen, further sales erosion of Neupogen and Aranesp and increasing competitive pressures on Enbrel. Meanwhile, uptake of key new drug, Repatha has been slow due to payer restrictions and the recent price cut will hurt sales, going forward.
Shares of Buy-ranked Intercontinental Exchange have underperformed the Zacks Securities and Exchanges industry year to date, gaining +10.9% versus +18.8%. Intercontinental Exchange’s third-quarter 2018 earnings beat expectations and also improved year over year on record revenues.
The Zacks analyst thinks Intercontinental Exchange’s successful integration of acquisitions, achievement of cost synergies and reduced debt level poise the company for long-term growth. Moreover, a continued strength in its energy franchise, improving recurring market data revenues and ongoing initiatives should keep growth on track.
However, rising expenses, foreign currency fluctuations and stricter regulations raise concerns. The company estimates 2018 operating expenses in the range of $2.04-$2.05 billion and adjusted operating expense in the band of $2-$2.04 billion. Interest expenses are anticipated at $73 million for fourth-quarter 2018.
TOTAL S.A.’s shares have gained +5.8% year to date, outperforming the Zacks Integrated International Oil industry which has declined -1.5% over the same period. The company’s earnings and revenues in the last reported quarter surpassed expectations, courtesy of improvement in commodity prices, as well as strong contribution from new upstream projects.
In addition, strategic acquisitions strengthened its portfolio and helped expand its operations. The Zacks analyst thinks the company is utilizing its strong cash-flow generating capacity to strengthen balance sheet and repurchase outstanding shares, which is positively impacting earnings.
However, operations in some politically-troubled regions and increasing competition could impact the company’s profitability. Due to its global presence, it is also exposed to risks associated with doing business abroad.
Other noteworthy reports we are featuring today include Royal Dutch Shell (RDS.A), Sysco (SYY) and Williams (WMB).
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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>>>