Top Analyst Reports for AbbVie, Berkshire & PepsiCo

Tuesday, April 17, 2018

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 AbbVie (ABBV), Berkshire Hathaway (BRK.B) and PepsiCo (PEP). 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 >>>

Shares of AbbVie have gained +45.5% in the past one year, outperforming the Zacks Large Cap Pharmaceuticals industry, which has gained +8.7% over the same period. AbbVie’s key drug Humira has been performing well based on strong demand trends, despite new competition.

Moreover, Imbruvica has multibillion dollar potential and AbbVie is exploring the possibility of label expansion into solid tumors and autoimmune diseases. AbbVie’s share performance is supported by a series of positive news including promising data from several pivotal studies, regulatory approvals, including its competitive HCV medicine Mavyret and two approvals for Imbruvica and settlement of its Humira patent disputes with Amgen.

In fact, Mavyret has become a major growth driver for AbbVie in a short time on the market. Also, several pivotal data readouts and regulatory milestones are expected in 2018. However, Viekira’s sales continue to be hurt by intensifying competition.

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

Buy-rated Berkshire Hathaway’s shares have gained +21.1% in the last year, outperforming the Zacks Property and Casualty Insurance industry which increased +17.4% during the same period. Berkshire’s inorganic story remains impressive with strategic acquisitions. A strong cash position allows it to make earnings-accretive bolt-on acquisitions.

Demand for utilities is expected to rise in the future and drive earnings growth. Continued insurance business growth also fuels increase in float. A sturdy capital level further adds impetus to the company. The insurance business generates maximum return on equity but its exposure to catastrophe loss remains a concern.

Huge capital expenses due to railroad operations also emerge as headwinds. Capital expenditure is estimated at $9.7 billion in 2019. The stock has seen the Zacks Consensus Estimate for 2018 and 2019 earnings moving north in the last 60 days.

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

PepsiCo’s shares have decreased -8.4% year to date, underperforming the Zacks Soft Beverages industry, which has declined -3.6% over the same period. Growing health awareness has been hurting the CSD category of the company, resulting in a 5% volume decline in 2017 in North America. Earnings estimates have moved 0.2% up for 2018 but 0.2% down for 2019, over the last 30 days.

Meanwhile, PepsiCo has been doing well on the back of significant innovation, continued momentum in Frito-Lay business, revenue management strategies, improved productivity and cost-saving initiatives, along with better market execution.

Moreover, an improving economy, better industry pricing dynamics and a consistency in positive innovation bode well. It rolled out several products recently which management believes will drive sales and profits in 2018.

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

Other noteworthy reports we are featuring today include BP (BP), Sanofi (SNY) and Twenty-First Century Fox (FOXA).

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The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.

Zacks’ has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.

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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>>>

Today's Must Read

AbbVie's (ABBV) Humira Blossoms, Pipeline in Focus in 2018

Berkshire Hathaway (BRK.B) to Gain from Railroad Business

PepsiCo (PEP) to Gain from Productivity Plans Amid Weak Sales

Featured Reports

Diversey Unit Sale, Higher Demand to Aid Sealed Air (SEE)

Per the Zacks Analyst, Sealed Air's sale of Diversey Care division will help it enhance focus on Food Care and Product Care divisions. Growing demand for core product portfolio will also aid results.

Macy's (M) Omnichannel Strategy, Private Brands to Lift Sales

Per the Zacks analyst, Macy's price optimization, cost containment and omnichannel strategy will help lift performance. The company's focus on private label brands will help boost profit margins.

Favorable Demographics to Drive AvalonBay's (AVB) Growth

Per the Zacks Analyst, favorable demographics, household formation and ample liquidity augur well for AvalonBay's long term growth. However, elevated supply remains a concern.

BP Plc (BP) Banks on Upstream Projects Amid Oil Spill Woes

While the Zacks analyst is optimistic about BP's strong portfolio of upstream projects, the oil spill incident of 2010 continues to affect the firm.

Xcel (XEL) To Gain from Renewable Focus, $18.5B Investments

The Zacks analyst believes Xcel Energy to benefit from its $18.5B capital expenditure directed towards its transmission, distribution, electric generation and renewable projects.

Operational Excellence Initiatives to Aid Weyerhaeuser (WY)

Per a Zacks analyst, Weyerhaeuser (WY) will gain from its operational excellence drive. Total benefits of $80-$110 million are anticipated from the Timberlands and Wood Products segments in 2018.

Unit Revenue Growth Buoys Delta (DAL) Amid Fuel Cost Woes

The Zacks analyst likes the company's performance with respect to unit revenues. Efforts to reward shareholders are also encouraging. High fuel costs are, however, limiting bottom-line growth.

New Upgrades

Strong HVAC Demand, Buyouts Catalysts for Emerson (EMR)

Per the analyst, Emerson is enjoying robust demand in global HVAC & refrigeration markets. Also, optimistic order trends and the recent Cooper-Atkins buyout will lend further momentum to the company.

Stryker (SYK) Gains Ground on Mako Total Knee Platform

Stryker's Mako Total Knee platform has consistently driven up the company's sales. The Zacks Analyst is also optimistic about the company's latest R&D initiatives to enhance Mako unit.

Robust Investment and Cash Generation Aid Entergy Corp (ETR)

Per the Zacks Analyst, Entergy Corp.'s investment plans of $11.22 billion in the 2018-2020 time frame and stable liquidity position backed by strong cash generation capacity aids its growth in future.

New Downgrades

Diabetes Unit Weakness to Hurt Sanofi's (SNY) Sales in 2018

Sanofi's Diabetes franchise is under significant pressure due to a tough U.S. payer environment, per the Zacks analyst. The declining trends in the franchise are expected to continue in 2018.

Cost Overruns & Volatile U.S. Demand Impairs Harris (HRS)

High dependency of sales revenue to the U.S. Government and risks of international business coupled with escalating operating costs limit Harris' growth momentum, per the Zacks analyst.

Delay in Sky Buyout to Hurt Twenty-First Century Fox (FOXA)

Per the Zacks analyst, growing concern over Twenty-First Century Fox's proposed acquisition of remaining 61% stake in Sky plc is likely to remain an overhang in the near term.

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Sanofi (SNY) : Free Stock Analysis Report
 
Pepsico, Inc. (PEP) : Free Stock Analysis Report
 
Twenty-First Century Fox, Inc. (FOXA) : Free Stock Analysis Report
 
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
 
BP p.l.c. (BP) : Free Stock Analysis Report
 
AbbVie Inc. (ABBV) : Free Stock Analysis Report
 
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