Today's Must Read
Subscriber Gains, Wireless Initiatives Benefit Charter (CHTR)
Biogen (BIIB) Rides on Spinraza and In-Licensing Agreements
Friday, February 8, 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 Visa (V), Charter Communications (CHTR) and Biogen (BIIB). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Visa’s shares have outperformed the Zacks Financial Transaction Services industry over the past year (+20.5% vs. +16%). Visa’s first-quarter fiscal 2019 earnings beat expectations and increased year over year. The results were driven by growth in payments volume, cross-border volume and processed transactions, and a lower tax rate.
The Zacks analyst thinks Visa’s strategic acquisitions and alliances, technology upgrades and effective marketing have paved the way for long-term growth and consistent increase in revenues. Visa is well poised to gain from growing electronic payment processing and a solid brand name. Its strong capital position enables investments in business.
Nevertheless, high client incentives and operating expenses, and foreign exchange volatility might put pressure on margins. Softness in cross border volumes is another concern.
Shares of Charter Communications have outperformed the Zacks Cable TV industry over the past year (-1.4% vs. -5.1%). Charter’s fourth-quarter 2018 revenues increased on growth in Internet, video, advertising and commercial revenues. Growth in Internet customers and rate adjustments aided Internet revenues in the reported quarter.
Additionally, Charter’s Spectrum Internet Gig service, which uses DOCSIS 3.1 technology, is available across its entire footprint. The Zacks analyst thinks this service, which provides enhanced Internet speed is expected to further boost subscriber growth. Moreover, Charter’s All Digital initiative, which will help the company offer advanced products and services and enhance video picture quality is now complete across its entire residential and business footprint.
However, Charter’s bottom line suffered due to higher interest expense. The company continues to struggle in a saturated and competitive multi-channel U.S. video market.
Biogen’s shares have outperformed the Zacks Biomedical and Genetics industry in the past year (-2.5% vs. -17.1%). Biogen beat estimates for earnings and sales in Q4. Biogen has a strong position in the MS market. The Zacks analyst likes the company’s efforts to diversify beyond MS to other areas like Alzheimer’s, Parkinson's and stroke among others.
Meanwhile, its newest drug Spinraza is performing well and has multi-billion dollar potential. Biogen’s efforts to regularly in-license assets to build its pipeline are encouraging since several of them have transformative potential. Several data readouts are expected in 2019 with multiple potential launches in the early 2020s.
However, its core MS business, excluding Ocrevus royalties, has been largely flat. Also, potential competition to Spinraza from competitors’ gene therapy programs for SMA is a concern. Though Biogen’s CNS pipeline is attractive, it is a high-risk area.
Other noteworthy reports we are featuring today include BP plc (BP), Roche (RHHBY) and BB&T (BBT).
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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>>>