Today's Must Read
New Drugs to Drive Lilly's (LLY) Sales Amid Generic Pressure
New Buyouts to Aid Boston Scientific (BSX), Pacer Sales Hurt
Wednesday, July 10, 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 Bank of America (BAC), Eli Lilly (LLY) and Boston Scientific (BSX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Bank of America’s shares have outperformed the Zacks Major Regional Banks in the past six months, gaining +12.5% vs. +10.8%. The company's earnings have surpassed expectations in each of the trailing four quarters.
The Zacks analyst thinks efforts to expand into new markets and digital offerings will likely enhance cross selling opportunities. Also, rise in loan balances, higher interest rates and efforts to control expenses will likely support profits. Further, the bank's enhanced capital deployment actions (approved by the Federal Reserve) reflect its strong balance sheet position.
However, dismal performance of capital markets amid a tough operational backdrop has been hurting the bank’s investment banking and trading operations, which in turn will hurt revenue growth. Litigation issues related to business misconduct in the pre-crisis period are likely to lead to higher legal costs.
Shares of Eli Lilly have lost 2.3% year to date, underperforming the Zacks Large Cap Pharmaceuticals industry, which has gained +2.3% over the same period. The Zacks analyst thinks that in 2019 Lilly’s revenue growth will be driven by higher demand for its newer drugs like Trulicity, Jardiance, Taltz, Verzenio and Emgality as some older drugs like Cialis face generic competition.
Lilly has made significant pipeline progress in the past year with several positive late-stage data readouts, multiple approvals and regulatory submissions. Lilly also added promising new pipeline assets through business development deals.
However, generic competition for several drugs including Cialis, rising pricing and competitive pressure, currency headwinds and the impact of the failed Lartruvo study are expected to hurt the top line. Estimates have gone down slightly ahead of Q2 results. Lilly has a positive record of earnings surprises in the recent quarter
Boston Scientific’s shares have outperformed the Zacks Medical Products industry over the past year, gaining +29.4% vs. +7.7%. The Zacks analyst stresses that Boston Scientific is consistently registering promising growth across all business lines and geographies.
The company recently received regulatory approval for the LOTUS Edge Aortic Valve System in the United States and is commencing controlled launch of the same in Europe. This apart, the company received a nod for the WATCHMAN Left Atrial Appendage Closure (LAAC) Device in Japan, obtained the CE Mark and initiated a limited market release for the next-generation WATCHMAN FLX LAAC Device in Europe.
On the flip side, Boston Scientific is suffering from significant cost escalation and declining worldwide pacemaker sales which are also hurting the CRM business.
Other noteworthy reports we are featuring today include ServiceNow (NOW), Schwab (SCHW) and Advanced Micro Devices (AMD).
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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>>>