Today's Must Read
CVS' (CVS) Aetna Integration Synergy Strong, PBM Season Solid
Health Care Business Aids 3M Company (MMM), High Costs Hurt
Tuesday, December 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 Toyota Motor (TM), CVS Health (CVS) and 3M (MMM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Toyota’s shares have outperformed the Zacks Foreign Automotive industry year to date (22.2% vs. 12.1%). The Zacks analyst believes that expanding portfolio of product lines is driving the firm’s sales.
In order to capitalize on the accelerated global shift to electric cars, the auto giant of Japan is deepening focus on developing electric and autonomous vehicles, which will bolster the company’s product competitiveness. Its healthy balance sheet, improving cash flows and investor-friendly moves are other positives. However, anticipating a slowdown in India, Indonesia and Thailand, the company narrowed its annual vehicle sales target for fiscal 2020.
High research and development expenses on advanced technologies for the development of EVs and driverless cars are likely to dent near-term margins. As such, investors are recommended to wait for a better entry point.
Shares of CVS Health have gained 17.2% in the past three months against the Zacks Retail Pharmacies and Drug Stores industry’s rise of 10.6%. The Zacks analyst is pleased with the company’s solid progress in terms of the 2020 selling season. It has started to witness increased customer traffic and incremental sales in pharmacy front store and MinuteClinics.
It successfully executed its strategic priorities, resulting in all three of the company’s segments performing in line with, or above its expectations. The Health Care Benefits segment, launched after the Aetna acquisition, is showing strong momentum.
The company posted better-than-expected third-quarter results on the back of robust progresses. However, persistent reimbursement pressure and the impact of recent generic introductions dented the company’s retail LTC business growth. Also, Omnicare business performance should continue to remain soft through the rest of 2019.
3M's shares have gained 0.5% over the past six months against the Zacks Diversified Operations industry's rise of 6.5%. The Zacks analyst believes that 3M stands to gain from the efforts to innovate products, restructuring actions and shareholder-friendly policies over the long run.
Its acquisition of the technology business of M*Modal is benefiting the health information systems business, while the Acelity buyout will likely strengthen the medical solutions business. In third-quarter 2019, the company’s earnings surpassed estimates by 4.5%, while sales lagged the same by 1.3%.
For 2019, 3M lowered its adjusted earnings per share guidance to $8.99-$9.09 from $9.25-$9.75 mentioned earlier. Organic sales will likely decline 1-1.5% versus previously mentioned 1% decline to 2% growth. Forex woes will likely adversely impact sales by 2%, while rising costs and restructuring charges might be concerning.
Other noteworthy reports we are featuring today include U.S. Bancorp (USB), Gilead Sciences (GILD) and Goldman Sachs (GS).
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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>>>