Today's Must Read
Robust Parks & Resorts, Studio Strength Drive Disney (DIS)
Organic Growth Aids Abbott (ABT), Alinity Drives Diagnostics
Friday, June 7, 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 Mastercard (MA), Disney (DIS) and Abbott (ABT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Mastercard’s shares have increased +28.9% in the past year, outperforming the Zacks Financial Transaction Services industry’s rally of +17.3%. The Zacks analyst thinks the company is poised for growth, given its solid market position, ongoing expansion and digital initiatives, and opportunities from the shift toward electronic payments. Its numerous acquisitions have aided revenue growth.
For several quarters now, the company has been gaining from higher switched transactions, increase in cross-border volumes and gross dollar volumes, and gains from acquisitions, partly offset by an increase in rebates and incentives. However, escalating costs will weigh on margins.
Also, in order to gain customers and more business, Mastercard has been incurring quite a high level of cost in terms of rebates and incentives, which remains a concern. However, its strong balance sheet enables business investment, thereby driving growth.
Shares of Disney have gained +25.5% year to date, outperforming the Zacks Media Conglomerates industry’s gain of +22.3% during the same period. The company’s top line in the near term is expected to benefit from the solid performance of Avengers: Endgame. Currently, the film holds the record for the fastest earning $1 billion film globally, beating Avengers: Infinity War’s record.
The Zacks analyst thinks Disney is likely to benefit from the strong adoption of ESPN+. Further, Disney+ (to be launched this November), which will be supported by Disney and Fox’s content, may give tough competition to Netflix and Amazon.
But increasing investments in ESPN+ and Disney+ and losses from streaming technology services are expected to hurt margins. Higher programming costs at ESPN due to increase in contractual rates for a few sports programs may keep profits under pressure.
Abbott’s shares have gained +26.6% over the past year, significantly outperforming the Zacks Medical Products industry, which has increased +2.2% over the same period. Abbott exited first quarter 2019 with better-than-expected earnings and revenues figures.
The Zacks analyst likes the company’s strong and consistent performance by the company’s EPD and Medical Devices segments on an organic basis. The company has been hogging the limelight within Diabetic Care on the growth it has enjoyed with FreeStyle Libre. Within Structural Heart, worldwide strong uptake of MitraClip has improved 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 Rhythm Management arm in the United States is denting growth. Increasing currency headwinds has somewhat dented Abbott’s international performance in the past-reported quarter.
Other noteworthy reports we are featuring today include Workday (WDAY), AutoZone (AZO) and Sun Life (SLF).
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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>>>