Today's Must Read
New Drugs to Drive Lilly's (LLY) Sales Amid Generic Pressure
Loan Growth Supports U.S. Bancorp (USB), Cost Woes Linger
Tuesday, February 12, 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 Disney (DIS), Eli Lilly (LLY) and U.S. Bancorp (USB). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Disney’s shares have gained 5.1% over the past year, outperforming the Zacks Media Conglomerates industry’s gain of 2.6% during the same period. Disney’s first-quarter fiscal 2019 results benefited from strong performance of Media Networks and Parks, Experiences & Consumer Products segments.
An increase in affiliate revenues and higher program sales at Cable Networks’ and Broadcasting boosted Media revenues. Parks revenues benefited from increase in guest spending and average daily room rates at domestic parks. The Zacks analyst thinks Disney’s content slate will likely get a significant boost following the completion of Fox transaction.
Notably, the combined entity received 37 nominations at this year’s Golden Globes. However, higher programming costs at ESPN and heavy investments in streaming services continue to hurt profitability. Softness experienced in Chinese tourism negatively impacted Shanghai Disney Resort results.
Shares of Eli Lily have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year, +54.9% vs. +6.2%. Lilly missed Q4 earnings estimates while beating the same for sales. However, Lilly lowered its guidance for 2019.
The Zacks analyst thinks revenue growth in 2019 will likely be driven by higher demand for newer drugs including Trulicity, Jardiance, Taltz, Verzenio as well as new migraine drug, Emgality as some older drugs like Cialis face generic competition. In 2018, Lilly made significant pipeline progress with several positive late-stage data readouts, multiple approvals and regulatory submissions.
Lilly also added promising new pipeline assets through business development deals. However, competitive pressure on Lilly’s drugs is expected to rise in 2019. Generic competition for several drugs including Cialis, rising pricing pressure, currency headwinds and the impact of the failed Lartruvo study are expected to put pressure on the top line.
U.S. Bancorp’s shares have outperformed the Zacks Major Banks industry over the past six months, losing -3.5% vs -10.5%. The company possesses an impressive earnings surprise history, beating expectations in all the trailing four quarters. Fourth-quarter 2018 results reflected higher revenues, aided by elevated fee income. However, reduced mortgage banking revenues and high expenses were on the downside.
The Zacks analyst thinks U.S. Bancorp's prospects will likely get support from its solid business model, core franchise, lower tax rate, rising interest rate and diverse revenue streams. Also, its organic growth remains solid and will likely benefit from the improving economic scenario.
U.S. Bancorp remains well poised to grow through acquisitions. However, escalating expenses due to its ongoing investments in technology and likely increase in legal expenses remain concerns.
Other noteworthy reports we are featuring today include Boston Scientific (BSX), Prudential (PRU) and Alexion (ALXN).
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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>>>