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Research Daily

Monday, October 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 General Dynamics (GD), Merck & Co. (MRK) and Progressive (PGR). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

General Dynamics’ shares have underperformed the Zacks Aerospace & Defense industry year to date (11.2% vs. 26.2%). The Zacks analyst believes that the company continues to witness strong order growth, securing some pivotal contracts from the U.S. government and its overseas clients. Deliveries of G600 can be expected from the third quarter.

Product innovations can be expected to enhance this shipbuilder’s footprint in the business jet market. However, rising interest expenses can be a potential headwind for the company’s bottom-line growth going ahead.

Moreover, delayed payments related to one of its large international vehicle programs in Canada are hurting its cash flow reserve. A comparative analysis of its historical EV/EBITDA ratio reflects a gloomy picture. 

(You can read the full research report on General Dynamics here >>>)

Shares of Merck have gained 2% in the past six months, outperforming the Zacks Large Cap Pharmaceuticals industry’s fall of 5.3% over the same period. The Zacks analyst believes that Merck’s new products like Keytruda, Lynparza and Bridion are contributing meaningfully to the top line.

Keytruda sales are gaining momentum with approval for additional indications, especially in the first-line lung cancer setting. Keytruda has strong growth prospects based on increased utilization, recent approvals for new indications and potential additional approvals worldwide. Animal health and vaccine products are also performing strongly and remain core growth drivers for Merck.

However, generic competition for several drugs and pricing pressure will continue to be overhangs on the top line. Rising competitive pressure on the diabetes franchise and products like Isentress (HIV), Zepatier (HCV) and Zostavax (vaccine) remains a concern.

(You can read the full research report on Merck here >>>).

Progressive’s shares have gained 6.7% over the past year compared with the Zacks Insurance - Property and Casualty industry’s decline of 4.7%. The Zacks analyst believes that Progressive’s focus on becoming a one-stop insurance destination, catering to customers opting for a combination of home and auto insurance, bodes well for growth.

Leadership in product, service and distribution innovation, especially in personal auto bodes well for long-term growth. Policies in force and retention ratio will continue to remain healthy. The company’s Snapshot, Robinson and Home Quote Explorer programs should continue to drive its business.

The company also pays back its shareholders via dividends and share repurchases. However, the company’s growth could be challenged by intense competition. Exposure to catastrophe events induces volatility to its underwriting results while escalating expenses weigh on margins are concerns.

 (You can read the full research report on Progressive here >>>).

Other noteworthy reports we are featuring today include ServiceNow (NOW), Air Products (APD) and Emerson (EMR).

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Mark Vickery
Senior Editor

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>>>

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