Today's Must Read
CVS Health (CVS) - Aetna Synergy Strong, PBM Aids Growth
Lead Drug Revlimid, Otezla Boost Celgene's (CELG) Growth
Friday, February 22, 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 McDonald’s (MCD), CVS Health (CVS) and Celgene (CELG). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
McDonald's shares have gained +14.9% in the past six months, outperforming the Zacks Restaurants industry which has gained +14.1% over the same period. The Zacks analyst likes McDonald’s impressive earnings surprise history, various sales and digital initiatives as well as positive comparable sales. In fourth-quarter 2018, the company not only delivered better-than-expected results but also reported robust comps growth.
In fact, global comps at McDonald’s have been positive over the trailing 14 quarters. Furthermore, increased focus on delivery and accelerated deployment of Experience of the Future restaurants in the United States should boost its performance. These apart, efforts to drive growth in International Lead & High Growth Markets bode well. Yet, high labor costs and currency headwinds remain major concerns.
Moreover, revenues have been under pressure for quite some time due to strategic refranchising initiatives. Even its heightened focus on refranchising might cut the capital requirements and facilitate EPS growth.
Shares of CVS Health have underperformed the Zacks Retail Pharmacies and Drug Stores industry in the past three months, losing -17.1% versus -14.9%. CVS Health ended the fourth-quarter 2018 on a promising note with better-than-expected results.
The year-over-year growth in the top line was driven by a strong Pharmacy Services segment, benefiting from the upside in the specialty services. During this quarter, CVS Health completed the $70-billion consolidation of Aetna marking the creation of a new healthcare powerhouse, which combines CVS Health’s pharmacy business with Aetna’s insurance base. Following this, CVS Health introduced a new segment- Health Care Benefits which the Zacks analyst thinks holds immense promise. Also, Retail/LTC comparisons are encouraging.
On the flip side, net benefits from the 2019 selling season are expected to be modest on Anthem-related headwinds. The company apprehends to see fewer RFP opportunities in the market than before. Also, Omnicare business performance should continue to remain soft through 2019.
Strong Buy-ranked Celgene shares have outperformed the Zacks Biomedical and Genetics industry in the past three months, gaining +33% vs. +0.9%. Celgene’s fourth-quarter results were strong as the company comfortably beat on both sales and earnings, led by a robust performance by Otezla.
The Zacks analyst thinks Revlimid and Pomalyst/Imnovid continue to drive overall growth with volume gains. Currently, the focus is on the recent merger agreement with Bristol-Myers Squibb Company. Per the terms, Celgene shareholders will receive 1.0 share of Bristol-Myers and $50.00 in cash for each share held. Celgene gets a reprieve from the acquisition, having faced a series of pipeline setbacks in recent times.
Meanwhile, Celgene is also working on label expansion of drugs like Pomalyst/Imnovid, Abraxane and Otezla among others, which is encouraging. The company is focused on the next cycle of innovation with five late-stage candidates — ozanimod, fedratinib, luspatercept, liso-cel and bb2121 — all of which are expected to be launched by the end of 2020.
Other noteworthy reports we are featuring today include Coca-Cola (KO), MetLife (MET) and Agilent (A).
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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>>>