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Top Analyst Reports for Berkshire Hathaway, Pfizer & U.S. Bancorp

Top Analyst Reports for Berkshire Hathaway, Pfizer & U.S. Bancorp

Tuesday, May 8, 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 Berkshire Hathaway (BRK.B), Pfizer (PFE) and U.S. Bancorp (USB). 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 >>>

Berkshire Hathaway’s shares have gained +20.6% in the last year, outperforming the Zacks Property and Casualty Insurance industry which increased +16.5% during the same period. Berkshire Hathaway’s first-quarter 2018 earnings soared 48.7% year over year, driven by lower effective tax rate.

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Though revenues declined, lower costs limited the downside. The Zacks analyst thinks Berkshire’s inorganic growth 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 its float increases.

A sturdy capital level further adds an 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 $10 billion in 2018.

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

Shares of Pfizer have outperformed the peer group over the last three months (the stock is up +2.2% over this period vs. a -2.7% decline for the Zacks Large-Cap Pharmaceuticals industry). Pfizer beat estimates for earnings but missed the same for sales in the first quarter of 2018.

Pfizer is facing headwinds in the form of genericization of key drugs, supply challenges in the legacy Hospira portfolio, pricing pressure and rising competition, which are hurting the top line. Nonetheless, the Zacks analyst thinks new products like Ibrance, contribution from acquisitions, cost-cutting efforts, a lower tax rate and share buybacks should help the company achieve its guidance.

Pfizer also boasts a strong pipeline and expects approximately 25 to 30 drug approvals through 2022, including around 15 products that have blockbuster potential. Pfizer’s growing immuno-oncology portfolio offers a strong potential. Bavencio is being considered a key long-term growth driver for Pfizer.

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

U.S. Bancorp’s shares have underperformed the Zacks Major Banks industry over the last six months, losing -3.4% vs +6%. However, the company possesses an impressive earnings surprise history, beating expectations in three out of the trailing four quarters.

The company’s first-quarter 2018 earnings reflected rise in net interest income backed by easing margin pressure and higher fee income. Further, elevated average loans and deposit balances were tailwinds. The Zacks analyst thinks U.S. Bancorp's prospects will likely get support from its solid business model, core franchise, lower tax rate, rising interest rate and diverse revenue streams.

Also, the company’s organic growth remains solid and will likely benefit from the improving economic scenario. However, escalating expenses and litigations remain key concerns. Additionally, stretched valuation underlines limited upside potential.

(You can read the full research report on U.S. Bancorp here >>>).

Other noteworthy reports we are featuring today include Tesla (TSLA), CME Group (CME) and Celgene (CELG).

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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

Berkshire (BRK.B) Set to Grow on Strong Insurance Business

Pfizer's (PFE) New Drugs, Cost Cuts & Low Tax to Aid Profits

Loan Growth Supports U.S. Bancorp (USB), High Costs a Woe

Featured Reports

Regeneron's (REGN) Eylea Drives Growth Amid Competition

Per the Zacks analyst, Regeneron's top-line is being boosted by growth driver Eylea's performance. A label expansion of the drug should further boost sales even though competition might stiffen up.

Archer Daniels' (ADM) Readiness Program to Fuel Growth

Per the Zacks analyst, Archer Daniels is on track with Readiness program that is building efficiency by reducing costs and transforming business with 1ADM plan.

D.R. Horton (DHI) Gains from Forestar Buyout & Solid Backlog

D.R. Horton is poised to benefit in fiscal 2018 from expanding operations in Texas with its recent Forestar buyout and robust backlog position, per the Zacks analyst

Debt Cut, Growth Projects Aid Newmont (NEM) Amid Cost Woes

The Zacks analyst is impressed with Newmont's efforts to reduce debt and improve efficiency. The company should also benefit from progress in its growth projects amid rising production costs.

Revlimid and Otezla to Boost Performance for Celgene (CELG)

Per the Zacks analyst, Celgene's key growth driver, Revlimid, continues to drive revenues along with Pomalyst and Otezla.

CME Group (CME) to Grow on Diverse Derivative Product Lines

Per the Zacks analyst, CME Group is well-positioned for growth based on a strong market position with diverse derivative product lines and strategic alliances.

Solid Balance Sheet, Strong U.S. Business Aids Aflac (AFL)

Per the Zacks analyst, Aflac continues to perform strongly in the United States, which has lifted top line growth.

New Upgrades

Alnylam (ALNY) Rides on Solid Patisiran Progress

Per the Zacks analyst, Alnylam's late stage pipeline candidate -patisiran, remains on track to be approved in the United States in mid-2018 and in Europe in late 2018.

Tesla (TSLA) Rides on Strong Vehicle Production & Automation

Per the Zacks analyst, Tesla gains from solid strides in vehicle production, deliveries and customer infrastructure. Also, it benefits from increasing automation in the Model 3 production process.

Waste Connections (WCN) Benefits from Operating Efficiency

The Zacks analyst believes that Waste Connections low-cost, highly-efficient operational structure allows it to expand into geographically contiguous markets.

New Downgrades

High Debt Levels, Rivalry Weigh On Huntington Ingalls (HII)

Per the Zacks analyst, Huntington Ingalls' debt levels increase its vulnerability to adverse economic conditions. Also, increasing competition in shipbuilding industry may hurt the stock.

Lower Subscription Bookings Ail Cerner (CERN)

The Zacks analyst is concerned about Cerner's lesser-than-expected subscription bookings that marred the licensed software growth. Lower margins on technology resale are a concern.

Pharmaceutical Pricing Issues Hurt Cardinal Health (CAH)

Per the Zacks analyst, Cardinal Health's profits in the Pharmaceutical segment were hurt by generic pharmaceutical pricing issues. Cordis-related tax rate increase is a major dampener.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
U.S. Bancorp (USB) : Free Stock Analysis Report
 
Tesla, Inc. (TSLA) : Free Stock Analysis Report
 
Pfizer Inc. (PFE) : Free Stock Analysis Report
 
CME Group Inc. (CME) : Free Stock Analysis Report
 
Celgene Corporation (CELG) : Free Stock Analysis Report
 
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
 
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