Top Analyst Reports for Berkshire Hathaway, Coca-Cola & Disney

Monday, September 10, 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), Coca-Cola (KO) and Disney (DIS). 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 >>>

Buy-ranked Berkshire Hathaway’s shares have outperformed the Zacks Insurance - Property and Casualty industry over the past year (+20.3% vs. +16.9%). The Zacks analyst thinks Berkshire Hathaway’s inorganic growth story remains impressive with strategic acquisitions. A strong cash position allows it to make earnings-accretive bolt-on buyouts. 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 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 to be $10 billion in 2018.

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

Shares of Coca-Cola have outperformed the Zacks Soft Drinks Beverages industry in the past year, (-1.7% vs. -6.2%), driven by a solid earnings trend with beat recorded in the last five quarters. The Zacks analyst thinks the company gains from the effective execution of strategies to evolve as a consumer-centric, total beverage company.

Further, the acceleration of its sparkling soft drinks category through investment and innovation bodes well. Though Coca-Cola reported top and bottom line beat in second-quarter 2018, reported revenues and operating margins were hurt by new accounting standards and negative currency.

Going forward, the company expects unfavorable currency to hurt both revenues and operating margin in the second half. Further, the company anticipates the Trump administration’s recent tariffs on aluminum to increase the cost of producing soda cans. This along with escalating freight costs and higher in other input costs is likely to result in increased prices for sodas, which should hurt profitability.

(You can read the full research report on Coca-Cola here >>>).

Disney’s shares have increased +3.3% year to date, outperforming the Zacks Media Conglomerates industry’s +2.3% gain in that same time period. The Zacks analyst thinks Disney’s top-line will benefit from the impressive line-up of big budget movies slated to be released over the next 18 months. Parks & Resorts segment is also expected to gain from significant visitor growth and increased per capita spending.

The pending acquisition of Fox will boost international presence as well as content portfolio. However, Disney’s ongoing investments on its technology platform are expected to keep margins under pressure. Additionally, higher programming costs at ESPN remains a concern. Moreover, weakness in the Consumer Products & Interactive Media segment is a headwind.

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

Other noteworthy reports we are featuring today include PetroChina (PTR), BHP Billiton (BHP) and Zoetis (ZTS).

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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>>>

Today's Must Read

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

Coca-Cola's (KO) Emerging Markets Presence to Boost Sales

Impressive Slate of Big Budget Movies to Drive Disney (DIS)

Featured Reports

Lower Debt, Investments Aid BHP Billiton (BHP) Amid Headwinds

Per the Zacks analyst, strong operational performance, lower debt, investments and a simplified portfolio will aid growth.

Downstream Unit Boosts PetroChina (PTR) Amid Output Woes

The Zacks analyst believes that higher prices and volumes of refined products should help PetroChina's earnings outlook but is worried over the company's weak oil production growth prospects.

Commodity Prices, Elevated Expenses Hurt Navistar (NAV)

Per the Zacks analyst, higher costs arising out of additional transport & freight expenses, and high commodity prices, particularly steel, are adding to Navistar's woes.

Five Below's (FIVE) Focus on Pre-Teen Customers to Fuel Sales

Per the Zacks analyst, Five Below's impressive merchandise, focus on pre-teen customers & pricing strategy should drive sales. Notably, comparable sales have been improving over the past few quarters.

Palo Alto (PANW) Rides on Portfolio Strength, Acquisitions

Per the Zacks analyst, Palo Alto Networks is benefiting from portfolio strength, which is helping it to win customers frequently. Moreover, strategic acquisitions like Secdo are driving growth.

Marvell (MRVL) Rides on Strong Cloud Data Storage Demand

Per the Zacks analyst, Marvell is benefiting from increased demand for data storage in the cloud, thereby helping it increase its foothold in the SSD (Solid-State Drive) market.

Restructuring Efforts Aid Ameriprise's (AMP) Revenue Growth

Per the Zacks analyst, Ameriprise is well poised for top-line growth given its strategic restructuring efforts and a well-diversified portfolio.

New Upgrades

Zoetis (ZTS) Riding High on Strong Companion Animal Business

Per the Zacks analyst, strong companion animal business will continue to drive growth for Zoetis. The acquisition of Abaxis will strengthen the company's animal health diagnostics market.

Donaldson (DCI) Aided by Price Realization & Cost Cut Moves

Per the Zacks analyst, stellar segmental sales, ongoing price-realization moves, strategic cost-reduction initiatives and stronger innovation will continue to drive Donaldson's near-term performance.

Sturdy Comps Run to Fuel Ollie's Bargain's (OLLI) Top Line

Per the Zacks analyst, Ollie's Bargain's business model of "buying cheap and selling cheap", cost control efforts and healthy comps run reinforce its position. Comps are likely to rise 2.5-3% in FY18.

New Downgrades

Weak Pressure Pumping Market to Hurt Patterson-UTI (PTEN)

The Zacks analyst is concerned over the weak market sentiment and lower utilization with respect to pressure pumping, which is expected to pressure Patterson-UTI's margins.

Europe's New Emission Testing Process to Hurt Autoliv (ALV)

Per the Zacks analyst, European Union's adoption of a new emission-testing procedure known as WLTP to check fuel consumption and carbon emissions will hamper Autoliv's volume sales in Europe.

Escalating Costs Weigh on MarketAxess' (MKTX) Margins

Per the Zacks analyst increasing expenses have weighed on the company's margins and the same are expected to rise over the coming quarters given its ongoing investments in business expansion.

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Zoetis Inc. (ZTS) : Free Stock Analysis Report
 
PetroChina Company Limited (PTR) : Free Stock Analysis Report
 
Coca-Cola Company (The) (KO) : Free Stock Analysis Report
 
The Walt Disney Company (DIS) : Free Stock Analysis Report
 
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
 
BHP Billiton Limited (BHP) : Free Stock Analysis Report
 
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