Today's Must Read
Accretive Acquisitions, Medicare Business Aid Anthem (ANTM)
Acquisitions Aid BlackRock (BLK), High Marketing Cost a Woe
Friday, December 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 Eli Lilly (LLY), Anthem (ANTM) and BlackRock (BLK). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-ranked Eli Lilly’s shares have gained +37.2% year to date, significantly outperforming the Zacks Large Cap Pharmaceuticals industry, which has gained +8.6% over the same period. The Zacks analyst thinks Lilly’s new products like Trulicity, Taltz, Basaglar, Cyramza, Jardiance, Lartruvo and Verzenio will drive revenues.
Lilly expects to launch 20 new products by 2023, including at least two new indications/line extensions on average every year. Lilly is also having a strong year in terms of its pipeline with several positive late-stage data readouts and regulatory nods. The newly launched CGRP antibody, Emgality could emerge as a significant contributor to long-term growth.
It has also added promising new assets through business development deals. However, competitive pressure on Lilly’s drugs is expected to rise this year. Challenges remain for the company in the form of generic competition for several drugs including Cialis and rising pricing pressure in the diabetes franchise.
Shares of Buy-ranked Anthem have outperformed the Zacks Medical Insurance industry's rally in the past year (up +27.8% vs. +23.1%). Moreover, it has witnessed its 2018 and 2019 earnings estimates move upward over the past 30days. The Zacks analyst likes the company's prudent acquisitions, an improving top line and divestitures.
A diverse product portfolio has also helped the company improve its underwriting results. Following the acquisition of America's 1st Choice and HealthSun Anthem, it emerged as the third largest Medicare Advantage plan in the fast-growing Florida market.
The company’s strong capital position backs effective capital deployment via share buybacks and regular dividends. Lower membership and rising debt continue to be causes for concern.
BlackRock’s shares have declined 27.2% in the past six months, underperforming the Zacks Investment Management industry’s loss of 22.4% during the same period. Yet, the company’s earnings surpassed expectations in all of the trailing four quarters.
The Zacks analyst likes the initiatives the company is taking to restructure its actively managed equity business and expand globally via acquisitions to further boost the top line. Moreover, its efficient capita deployment activities will continue to enhance shareholder value.
However, mounting expenses, mainly due to continued rise in marketing costs, might hurt bottom-line growth to some extent. The company's high dependence on overseas revenues also remains a matter of concern.
Other noteworthy reports we are featuring today include CME Group (CME), Exelon (EXC) and Southern Company (SO).
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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>>>