Today's Must Read
Las Vegas Sands (LVS) Banks on Macao Business to Drive Growth
Biogen (BIIB) Rides on Alliances, Spinraza Competition Lurks
Wednesday, May 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 Chubb (CB), Las Vegas Sands (LVS) and Biogen (BIIB).These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Chubb’s shares have gained +8.1% in the past year, outperforming the Zacks Property, Casualty and Title industry, which has increased +2.8% over the same period. The Zacks analyst thinks the company benefits from a suite of compelling products as well as services. Its inorganic growth story is impressive, helping it to achieve a higher long-term ROE.
Increased scales, efficiencies and a solid balance sheet will lend it a competitive edge. It estimates solid growth in Overseas General operations, which includes both commercial and consumer lines. A strong capital position aids Chubb to boost shareholders’ value and invest in strategic initiatives for driving growth.
However, exposure to cat loss remains a concern as it induces volatility in underwriting profitability. Also, mounting expenses weigh on margin expansion. Chubb Limited’s first-quarter 2019 core operating income of $2.54 per share outpaced the Zacks Consensus Estimate of $2.49 by 2% and also improved 8.5% year over year on the back of robust premium growth and net investment income.
Shares of Buy-ranked Las Vegas Sands have gained +15.7% over the past six months, outperforming the Zacks Gaming industry’s increase of +11%. The Zacks analyst thinks that increased revenues at casino, rooms and mall drove the company’s top line in first-quarter 2019. It generated solid revenues from Macao operations as well.
In the next couple of years, the company is likely to spend $2 billion in Macao. To strengthen the resort portfolio, Las Vegas Sands is focusing on expanding the Four Seasons Tower Suites Macao, St. Regis Tower Suites Macao and the Londoner Macao. Planned investment in new capital projects in Macao and higher revenues from The Parisian Macao are also likely to drive growth.
Las Vegas Sands’ consistent focus on a convention-based Integrated Resort business model is an added positive. Nevertheless, high debt and competition are worrisome. Estimates for the current year have witnessed upward revisions in the past 60 days.
Biogen’s shares have underperformed the Zacks Biomedical and Genetics industry year to date (-22.6% vs. +2.2%). Biogen beat estimates for earnings and sales in Q1. The Zacks analyst thinks the Biogen has a strong position in the MS market. Efforts to diversify beyond MS to other areas like Alzheimer’s, Parkinson's and stroke among others are encouraging.
Meanwhile, its newest drug Spinraza is performing well and has multi-billion dollar potential. Biogen’s effort to regularly in-license assets to build its pipeline is a major positive with several having transformative potential. Several data readouts are expected in 2019/2020 with multiple potential launches in the early 2020s.
However, its core MS business, excluding Ocrevus royalties, has been on a declining trend. 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 Duke Energy (DUK), Dollar General (DG) and Canadian Pacific (CP).
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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>>>