Today's Must Read
Abbott's (ABT) Vascular Sales Soft, Diabetes Care Grows Well
Portfolio Strength Benefits PayPal (PYPL) Amid Competition
Tuesday, March 5, 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), Abbott (ABT) and PayPal (PYPL). 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 +34.2% year to date, outperforming the S&P 500, which increased +11.4% during the same time period. 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. The Zacks analyst thinks Boeing’s strong balance sheet and cash flows provide financial flexibility in matters of incremental dividend, ongoing share repurchases and earnings accretive acquisitions.
Its revenue exposure is also spread across more than 90 countries around the globe. However, this aerospace giant may face competitive challenges once new manufacturers like China enters the commercial jet space.
Shares of Abbott have gained +9.9% over the past three months, outperforming the S&P 500, which has increased +3.6% over the same period. Abbott exited the fourth quarter on a mixed note with earnings in line with expectations and revenues missing the mark. Increasing currency headwinds to some extent dented the company’s international performance.
Meanwhile, emerging market performance has been promising. The Zacks analyst is optimistic about the strong and consistent performance by the company’s EPD and Medical Devices segments organically. The company has been hogging the limelight within Diabetic Care on growth with FreeStyle Libre. Within Structural Heart, worldwide strong uptake of MitraClip improves further following the FDA approval of its upgraded version.
This apart, synergies from Alere consolidation in the form of revenues from Rapid Diagnostics have been driving growth. On the flip side, sluggish Vascular arm in the United States continues to dent growth.
PayPal’s shares have outperformed the S&P 500 in the past year (+22.1% vs. +2.6%). The Zacks analyst thinks PayPal’s rising transaction revenues, growth in active customer accounts and benefits from acquisitions of Hyperwallet and iZettle remain growth drivers. Further, Venmo’s improving monetization efforts, partnerships and its increasing adoption rate across various platforms are aiding the company’s user base.
Strong momentum of PayPal in international markets, especially in India and Japan remained a major positive. However, adverse foreign exchange translations, competition from Square and interest rate risks are concerns. Further, sale of the credit portfolio to Synchrony is expected to continue impacting negatively. Also, a challenging macroeconomic environment in China and the UK remain concerns.
Other noteworthy reports we are featuring today include Bristol-Myers (BMY), Caterpillar (CAT) and Anthem (ANTM).
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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>>>