Today's Must Read
Abbott (ABT) EPD Gains in Emerging Space on Branded Generics
Eliquis, Label Expansion of Opdivo Fuel Bristol-Myers (BMY)
Wednesday, August 21, 2019
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features updated research reports on 16 major stocks, including Home Depot (HD), Abbott (ABT) and Bristol-Myers (BMY). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.
Home Depot’s shares have gained +21% year to date, outperforming the Zacks Retail Building Products industry’s +19.5% increase. The Zacks analyst thinks that this is attributable to a robust earnings surprise trend recorded for more than five years, which continued in second-quarter fiscal 2019.
Earnings benefited from progress on strategic investments as well as a favorable U.S. consumer backdrop and a steady housing market. Meanwhile, the company’s top line lagged estimates but improved year over year on robust comps performance. Its efforts to provide an interconnected shopping experience to customers, with innovative products and improved productivity, position it for growth.
Despite these gains, lumber price deflation remained a drag on the company’s sales and comps in the fiscal second quarter. Further, it slashed its sales and comps view for fiscal 2019 on lumber price deflation and fears of potential impacts of the newly enacted tariffs.
Shares of Abbott have gained +30.2% over the past year, significantly outperforming the Zacks Medical Products industry, which has increased +3.2% over the same period. Abbott exited second quarter 2019 with better-than-expected earnings. However, revenues lagged the estimates.
The Zacks analyst is optimistic about the strong and consistent EPD and Medical Devices performance. The company has been hogging the limelight within Diabetic Care on growth with FreeStyle Libre. This apart, synergies from Alere consolidation in the form of Rapid Diagnostics have been driving growth. Within Structural Heart, worldwide uptake of MitraClip therapy improves further.
Meanwhile, the company’s emerging market performance has been promising. Consequently, Abbott has raised its full-year guidance. On the flip side, sluggish Rhythm Management arm in the United States continues to dent growth. Increasing currency headwind is another downside.
Bristol-Myers’ shares have underperformed the Zacks Large Cap Pharmaceuticals industry in the year-to-date period, losing -8.7% vs. -2.1%. The Zacks analyst thinks Bristol-Myers’ lead immuno-oncology drug, Opdivo, continues to drive growth. Label expansion of Opdivo into additional indications should further boost the top line. Empliciti and Sprycel are also performing well.
Bristol-Myers also has presence in other core therapeutic areas, including immunoscience and cardiovascular. Blood thinner drug, Eliquis, is expected to drive further growth, propelled by increased share in the novel oral anticoagulant (NOAC) market.
The impending acquisition of Celgene Corporation will broaden Bristol-Myers’ oncology portfolio with the addition of blockbuster drug, Revlimid. However, pipeline setbacks are a concern. The failure of the part 2 of the Checkmate-227 study was disappointing, given the potential in the NSCLC market.
Other noteworthy reports we are featuring today include Activision (ATVI), MPLX LP (MPLX) and Marathon Petroleum (MPC).
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Note: Our Director of Research 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>>>