Today's Must Read
Investment & Innovation Fuel Coca-Cola's (KO) Growth
New Drugs Support Amgen's (AMGN) Sales, Pipeline Strong
Thursday, July 4, 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), Coca-Cola (KO) and Amgen (AMGN). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.
Mastercard shares have increased +33% in the past year, outperforming the Zacks Financial Transaction Services industry’s rally of +27.9%. The Zacks analyst thinks the company is well positioned for growth, given its solid market position, ongoing expansion, digital initiatives and opportunities from the shift toward electronic payments. Its numerous acquisitions have aided revenue growth. The company has been gaining from higher switched transactions, increase in cross-border volume and gross dollar volume, partly offset by an increase in rebates and incentives. However, escalating costs will put pressure on margins. Also, in order to gain customers and new business, Mastercard has been incurring a high level of cost under rebates and incentives, which remains a concern. But strong balance sheet enables it for higher business investments.
Shares of Coca-Cola have increased +14% in the past year, outperforming the Zacks Soft Drinks Beverages industry's +4.1% gain. The Zacks analyst thinks this is largely attributable to the effective execution of strategies aimed at evolving into a consumer-centric total beverage company. This approach has bolstered its quarterly performances as is evident from a robust surprise trend. First-quarter 2019 marked its seventh positive earnings surprise in the last eight quarters and the seventh straight sales beat. Ongoing productivity efforts and a disciplined growth strategy along with robust performance across segments are aiding top and bottom lines. Innovation and investment in core categories and brands have been the primary focus area, leading to the expansion of retail value share. Moreover, global re-franchising initiatives are expected to boost margins. However, Coca-Cola expects adverse currency rates to mar comparable revenues and operating income in the second quarter and 2019.
Amgen shares have lost -5.4% year to date versus the Zacks Biomedical and Genetics industry's rally of +8.3%. The Zacks analyst thinks that while Amgen’s newer drugs — Prolia, Xgeva, Blincyto, Kyprolis — will drive sales, biosimilar and brand competition faced by its legacy products will create pressure on the top line. However, recently launched products including Aimovig, biosimilars and international expansion provide incremental growth opportunities. Amgen is also progressing successfully with its pipeline. In the past five years, Amgen has launched nine products, including two in new therapeutic areas. Amgen boasts of a strong biosimilars pipeline, which could be an important long-term growth driver. Amgen’s restructuring plan is making it leaner and more cost efficient. Estimate revisions have been mixed ahead of its Q2 earnings release. However, Amgen has a positive record of earnings surprises in the past few quarters.
Other noteworthy reports we are featuring today include Caterpillar (CAT), CVS Health (CVS) and PNC Financial (PNC).
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