Top Stock Reports for UPS, Merck & BHP Billiton

Friday, October 19, 2018

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including United Parcel Service (UPS), Merck (MRK) and BHP Billiton (BHP). 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 >>>

United Parcel Service’s shares have outperformed the Zacks Transportation - Air Freight and Cargo industry in the last three months, gaining +4.2% vs. +0.2%. Solid e-commerce growth is a huge positive for the company and should aid its third-quarter results, scheduled to be disclosed on Oct 24.

Additionally, the company's transformation plan, unveiled in September 2018, is aimed at boosting its bottom line. The Zacks analyst is also impressed by UPS' efforts to reward shareholders. To this end, in February 2018, UPS hiked quarterly dividends by 10%. The company's bullish full-year forecast on free cash flow supports the possibility of a dividend hike in the near future.

Moreover, UPS is leaving no stone unturned to perform well in the upcoming holiday season. It intends to hire roughly 100,000 seasonal workers during the season. 

(You can read the full research report on United Parcel Service here >>>).

Shares of Merck have gained +11.1% in the last three months, outperforming the Zacks Large Cap Pharmaceuticals industry, which gained 3.9% over the same period. Merck’s new products like Keytruda, Lynparza, and Bridion should continue to drive sales.

Keytruda sales are gaining strong momentum with approval for additional indications especially in the first-line lung cancer setting as it is the only anti-PD-1 approved in this setting. Animal Health unit is also strong and remains a core growth driver for Merck. Meanwhile, Merck will continue to focus on cost-cutting initiatives to drive the bottom line.

However, generic competition for several drugs and pricing pressure will continue to be overhangs on the top line. Estimates have gone up ahead of the company’s Q3 earnings release. Merck has a positive record of earnings surprises in the recent quarters.

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

BHP Billiton’s shares have outperformed the Zacks Mining - Miscellaneous industry over the past six months (3.1% vs. -7.3%).  Recently, BHP Billiton entered an agreement to acquire 6.1% interest in SolGold, with which it will gain shares of the Cascabel copper-gold project in Ecuador. The company is also trying to make its operations more efficient on the back of smarter technology adoption across the entire value chain.

BHP has entered agreements for the sale of its onshore U.S. assets for $10.8 billion, to simplify and strengthen its portfolio and generate shareholder returns. Moreover, strong cash flow position, lower debt levels and higher operational efficacy will likely strengthen BHP Billiton’s competency in the near term.

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

Other noteworthy reports we are featuring today include Energy Transfer Partners (ETP), PACCAR (PCAR) and Parker-Hannifin (PH).

Mark Vickery
Senior Editor
 

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>

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

E-commerce Demand, Dividends & Buybacks Aid UPS, Costs Ail

Merck's (MRK) New Drugs Drive Sales Amid Rising Competition

BHP Billiton (BHP) Bets on Operational Efficiency, Liquidity

Featured Reports

Essex's (ESS) Solid Portfolio to Aid Growth Amid Supply Woes

The Zacks analyst expects Essex Property to gain from strong West Coast portfolio and solid balance sheet.

Bio-Rad (BIO) Banks on Global Prospects Amid Margin Woes

Bio-Rad's solid growth in North America, China and Asia Pacific buoys optimism. The Zacks analyst is worried about adverse product mix and rising logistics costs.

KBR Banks on Acquisitions & Strong Backlog, Competition Ails

Per the Zacks analyst, robust backlog, continuous acquisitions and the strength of its Government Services segment are driving factors.

Sunoco and PennTex Buyouts Buoy Energy Transfer (ETP)

Per the Zacks analyst, Energy Transfer's acquisition deals with Sunoco and Penn Tex are likely to boost growth momentum.

Lease Business Growth Buoys Ryder (R) Amid Debt Woes

The Zacks analyst is impressed by the growth in Ryder's lease fleet. The company's strong customer base is also a positive.

New Upgrades

Parker-Hannifin (PH) Gains From Win Strategy & Solid Sales

Per the Zacks analyst, solid end-market sales, Win Strategy, realignment moves and lower corporate tax rates will continue to enhance Parker-Hannifin's profitability.

PACCAR (PCAR) Rides on Rising Demand for Class 8 Trucks

PACCAR's U.S. Class 8 truck retail sales are rising. Per the Zacks analyst, demand for trucks is rising due to strong economic growth, high consumer spending and heightened construction activities.

New Downgrades

Michael Kors (KORS) Hurt by Soft Wholesale & Licensing Sales

Per the Zacks analyst, Michael Kors is grappling with soft Wholesale & Licensing sales for quite some time now. This is likely to persist throughout fiscal 2019.

High Costs and Forex Woes to Hurt IDEX's (IEX) Results

Per a Zacks analyst, high costs and unfavorable foreign currency movements will play spoilsport for IDEX. Forecast for corporate expenses has been raised for 2018.

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
 
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
 
Parker-Hannifin Corporation (PH) : Free Stock Analysis Report
 
PACCAR Inc. (PCAR) : Free Stock Analysis Report
 
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
 
BHP Billiton Limited (BHP) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.