Today's Must Read
Operational Efficiency Aid BHP Group (BHP), Low Prices Ail
Strength in the Pharmacy Services Aids CVS Health (CVS)
Monday, March 23, 2020
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 Bristol-Myers Squibb (BMY), BHP Group (BHP) and CVS Health (CVS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Bristol-Myers’ shares have outperformed the Zacks Large Cap Pharmaceuticals over the past six months (-3.2% vs. -11.9%). The Zacks analyst believes that Bristol-Myers’ blockbuster immuno-oncology drug, Opdivo, and Eliquis have maintained the company’s momentum. Label expansion of Opdivo into additional indications should further boost the top line.
Empliciti and Sprycel are also performing well on label expansions. Blood thinner drug, Eliquis, is expected to drive further growth, propelled by increased share in the NOAC market. Meanwhile, the acquisition of Celgene has strengthened the company’s oncology portfolio with the addition Revlimid.
The acquisition will also strengthen the company’s pipeline with encouraging candidates. However, concerns will rise once Revlimid loses patent protection. Moreover, the company is facing headwinds like stiff competition from other immuno-oncology drugs and pipeline setbacks.
Shares of BHP have lost 40.3% over the past year against the Zacks Mining - Miscellaneous industry’s fall of 38.7%. The Zacks analyst believes that BHP Group’s strong cash flow and focus on lowering debt are likely to enhance its capability.
The company maintains capital and exploration expenditure guidance below $8 billion for fiscal 2020 and $8 billion for fiscal 2021. It currently has six major projects under development in petroleum, copper, iron ore and potash. Efforts to make operations more efficient on the back of smarter technology adoption across the entire value chain will drive growth.
However, slowdown in global growth and lower commodity prices due to the coronavirus outbreak is likely to impact results. The consensus estimate for earnings for the current fiscal has undergone negative revision lately. Nevertheless, even though metal prices remain subdued in the near term, it will eventually pick up on the back of the impending demand-supply imbalance.
CVS Health’s shares have lost 26.6% over the past three months against the Zacks Retail Pharmacies and Drug Stores industry’s fall of 25.1%. The Zacks analyst believes that the company’s recently-introduced Health Care Benefits segment, following the Aetna acquisition, holds immense promise.
Additionally, solid year-over-year Retail/LTC comparisons were impressive. Strong expansion of both margins further buoys optimism on the stock. The expansions of MinuteClinics and HealthHUBs during the quarter are also encouraging. CVS Health ended the fourth quarter with better-than-expected numbers. However, the LTC business is facing some industry-wide challenges. Reimbursement risk continues to be a dampener.
Other noteworthy reports we are featuring today include T-Mobile US (TMUS), Southern (SO) and Anthem (ANTM).
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