Today's Must Read
Strategic Buys, End-Market Strength Aid Thermo Fisher (TMO)
Accretive Acquisitions Aid Anthem's (ANTM) Revenues
Friday, February 01, 2019
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 Boeing (BA), Thermo Fisher (TMO) and Anthem (ANTM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Strong Buy-ranked Boeing’s shares have gained +10.5% in the past year, outperforming the Zacks Aerospace & Defense industry, which declined -6% during the same time period. Boeing ended 2018 on an impressive note. The company’s fourth quarter earnings as well as revenues exceeded the respective expectations.
The Zacks analyst emphasizes that the company is the largest aircraft manufacturer in the world. The company’s 20-year market outlook forecasts commercial jetliner demand to increase by 4.1%, with single-aisle jets being the major driver behind this demand growth. Boeing expects the commercial fleet to be fueled by sustained annual growth in commercial passenger traffic along with a big wave of retiring, old planes.
Boeing’s strong balance sheet and cash flows provide financial flexibility in matters of incremental dividend, ongoing share repurchases and earnings accretive acquisitions. However, this aerospace giant may face competitive challenges if new manufacturers like China enter the commercial jet space.
Shares of Thermo Fisher have outperformed the Zacks Medical Instruments industry in the past three months (+4.9% vs. +0.5%). Thermo Fisher ended the fourth quarter 2018 on a promising note showing strength in all end markets categorized either by customer type or geography.
The company registered particularly solid international performance with strong growth in Asia-Pacific including China. Also, a series of product launches with progress in precision medicine initiatives aided its performance.
The Zacks analyst is currently optimistic about the company’s recent purchases of Advanced Bioprocessing business from BD and its initiative to buy Gatan to boost its electron microscopy suite. Even after considering the impact of the company’s impending divestiture of its Anatomical Pathology business, 2019 guidance looks pretty encouraging.
On the flip side, Thermo Fisher’s business segments are getting impacted by unfavorable business mix. Also, competitive headwinds and escalating costs pose a threat.
Buy-ranked Anthem’s shares have outperformed the Zacks Medical Insurance industry's rally in the past year (up +26.7% vs. +17.3%). Anthem’s fourth-quarter 2018 earnings surpassed expectations by 10.9%. The bottom line soared 89.1% year over year, driven by a solid operating performance and contribution across all core businesses.
The Zacks analyst thinks the company's prudent acquisitions and an improving top line have paved the way for long-term growth. A diverse product portfolio has also helped the company enhance its underwriting results. Anthem’s strong capital position backs effective capital deployment via share buybacks and regular dividends.
However, its declining membership is a persistent concern. Also, the company has been suffering from high benefit costs and rising selling, general and administrative expenses.
Other noteworthy reports we are featuring today include PayPal (PYPL), Pfizer (PFE) and Equity Residential (EQR).
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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>>>