Today's Must Read
Restructuring to Aid General Electric (GE), Power Woes Exists
Strategic Initiatives Aid Anthem (ANTM), Rising Costs Hurt
Thursday, November 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 Alibaba Group (BABA), General Electric (GE) and Anthem (ANTM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Alibaba’s shares have underperformed the Zacks Internet Commerce industry year to date (34.4% vs. 27.6%). The Zacks analyst believes that Alibaba’s strengthening cloud business with its expanding customer base drove its performance.
Alibaba reported strong fiscal second-quarter earnings driven by steady improvement in core commerce and solid growth in metrics. Notably, the New Retail strategy has gained momentum in the markets served by the company. This aided growth in Tmall Import and Hema fresh food grocery businesses.
However, revenues missed the Zacks Consensus estimate due to higher expenses. The company’s increasing investments, uncertain economy and macro headwinds in China are major concerns. Also, rising competition poses a risk.
Shares of General Electric have gained 8.5% in the past six months against S&P 500’s rise of 6.7%. The Zacks analyst believes that in the quarters ahead, the company is poised to gain from its portfolio restructuring program, digital business, efforts to reduce leverage, international commercial presence and improvement in segmental businesses.
It expects adjusted earnings per share of 55-65 cents for 2019. Healthy business in Aviation, Healthcare and Renewable Energy segments as well as steps to improve the Power segment and asset dispositions in GE Capital will be boons. In third-quarter 2019, the company’s earnings surpassed estimates by 25%, while revenues lagged the same by 19.8%.
The presence of internal and external challenges remains a drag for the Power business. Also, weak margin in Renewable Energy, forex woes and tariffs might adversely impact performance.
Anthem’s shares have declined 3.9% over the past three months against the Zacks Medical Insurance industry’s rise of 0.3%. The Zacks analyst believes that the company’s prudent acquisitions and collaborations complement its organic growth and helps it boost Medicare Advantage growth.
It has launched successful partnerships with various companies and it expects its partnership model to accelerate growth. Its growing top line paves the way for long-term growth. A diverse product portfolio also helped it enhance its revenues. Its strong capital position and solid guidance also impress.
Its third-quarter 2019 earnings of $4.87 per share surpassed the Zacks Consensus Estimate by 0.6% and grew 27.8% year over year on higher revenues. However, it has been suffering from high benefit costs and selling, general and administrative expense, which continues to weigh on its bottom line. Rising level of debt is another concern.
Other noteworthy reports we are featuring today include Emerson (EMR), Progressive (PGR) and Regeneron Pharmaceuticals (REGN).
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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>>>