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Research Daily

Tuesday, November 29 2016

Today's Research Daily features new research reports on 16 major stocks, including UnitedHealth (UNH), 21st Century Fox (FOXA) and Sanofi (SNY).

UnitedHealth shares have gained more than 29% year-to-date, outperforming the medical health maintenance organization industry by a wide margin. UnitedHealth issued optimistic guidance for 2017, backed by stable medical costs, higher contribution from Optum and decline in exposure from its public exchange business. The analyst stresses that the company is consistently gaining from the Medicaid and Medicare businesses. Continued growth at Optum is also leading to a diversified revenue source. The segment should see further growth from the Catamaran acquisition. Also, UnitedHealth should benefit from its capital strength, niche market position and a track record of returning excess cash to shareholders through dividend hikes and share buybacks. But industry fees and taxes, losses on public exchange business and overall uncertainty about the fate of ObamaCare are some of the headwinds. (You can read the full research report on UnitedHealth here>>)

21st Century Fox shares have lagged the consumer discretionary sector and the broader market in the year-to-date period, but they have performed better than the movie/TV production distribution industry. Twenty-First Century Fox posted its second straight positive earnings surprise, when it reported first-quarter fiscal 2017 results. The analyst likes its strong cable network programming, which has been its driving force, backed by rising affiliate fees. However, increase in programming costs and fluctuation in foreign currency exchange rate continues to act as a headwind for Twenty-First Century Fox. Further, it expects costs at its cable network to go up in fiscal 2017. Increase in expenses may dent the company’s margins and in turn the bottom line. (You can read the full research report on 21st Century Fox here>>)

Shares of French drug giant Sanofi have lagged the broader market in the year-to-date period, though they have done better than the peer large-cap pharma group on the back of strong quarterly results. The analyst likes the company’s focus on streamlining its business and pursuing business development deals. Further, products like Toujeo, Aubagio and Lemtrada are likely to do well. However, Sanofi’s Diabetes franchise is under significant pressure with key product Lantus, facing increasing competitive pressure at the payer level and biosimilar competition in several European markets & Japan.  Sanofi’s outlook for its Diabetes franchise over the 2015–2018 timeframe is also bleak. Other headwinds include generic competition and slower-than-expected uptake of new products like Praluent. (You can read the full research report on Sanofi here>>)

Other noteworthy reports we are featuring today include MasterCard (MA), Horizon (HZNP) and Barclays (BCS).

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Sheraz Mian

Director of Research

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