Credit: Shutterstock photoTuesday, May 1, 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 Amazon (AMZN), Bristol-Myers (BMY), and Time Warner (TWX). 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 Amazon 's shares have outperformed the broader market in the past year (the stock is up +65.4% vs. the +10.7% gain for the S&P 500 as a whole). The Zacks analyst thinks Amazon is benefiting from an expanding AWS enterprise customer base and increasing number of paid Prime members. In the first-quarter, AWS was selected by enterprise customers like GoDaddy, Cox Automotive, Shutterfly, NextGen Healthcare, Amway and LG Electronics. Moreover, collaboration with VMware is expected to boost AWS product offerings in the long haul.
Notably, AWS generates much higher margins than retail, positively impacting Amazon's profitability. Additionally, Amazon's expanding distribution footprint bodes well for Prime. The company recently increased Prime's subscription fee, which is likely to hurt subscriber additions going forward. Moreover, increased operating expenses to support expansion of its business into new markets and territories, localize the availability of products and grow its content will keep margins under pressure.
(You can read the full research report on Amazon here >>> ).
Shares of Bristol-Myers have underperformed the Zacks Large Cap Pharmaceuticals industry in the last six months, losing -16.2% vs. -3.2%. Bristol-Myers beat both earnings and revenues expectations, primarily on robust sales of Opdivo and Eliquis in the quarter. Opdivo delivered strong performance, maintaining leading shares across approved indications in melanoma, RCC, lung, and head and neck.
The increase in 2018 guidance for adjusted earnings was also encouraging. The Zacks analyst likes Bristol-Myers' efforts to develop its pipeline, especially Opdivo. Several label expansion applications for Opdivo are under review in the United States and Europe. Potential approval will further boost the prospects of this blockbuster drug.
Also, the superiority of Eliquis in real world data analysis is expected to further boost sales of the drug. However, pricing concerns, stiff competition in the immuno-oncology space are expected to remain an overhang
(You can read the full research report on Bristol-Myers here >>> ).
Time Warner 's shares have lost -4.6% over the last year, outperforming the Zacks Media Conglomerates industry's -11.6% decline in that same time period. The Zacks analyst likes the company's foray into new markets and digital efforts, and investments in video content and technology. Time Warner is now focusing on original programming, cost containment and increasing investments in key areas to enhance profitability.
Notably, the company has positive record of earnings surprises in recent times. However, management's projection of decline in operating income across its segments in first-quarter 2018 raises concern. The company also expects HBO's content and other revenues to decline considerably in the quarter. Moreover, its takeover by AT&T has hit a roadblock due to DOJ's antitrust concerns, which can drag down share price in the near term.
(You can read the full research report on Time Warner here >>> ).
Other noteworthy reports we are featuring today include Northrop Grumman (NOC), LyondellBasell (LYB) and Honda (HMC).
Wall Street's Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It's a once-in-a-generation opportunity to invest in pure genius.
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 Trendsand Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Robust AWS Revenues, Solid Prime Growth Drives Amazon (AMZN)
Bristol-Myers (BMY) Opdivo To Drive Growth Amid Competition
Higher Sports & Programming Costs to Hurt Time Warner (TWX)
Featured Reports
Positive Budget to Aid Northrop Grumman (NOC) Amid Cost Woes
Per the Zacks analyst, the current expansionary U.S. budgeting policy is likely to boost defense primes like Northrop. Yet escalating operating costs may weigh on its profit margin.
HDPE Project, A. Schulman Buyout Aid LyondellBasell (LYB)
The Zacks analyst thinks that LyondellBasell's HDPE project will boost its annual production capacity and improve margins. The buyout of A. Schulman will also create significant cost synergies.
Intermodal Volumes Aid Norfolk (NSC), Automotive Unit Ails
The Zacks analyst appreciates the growth in intermodal volumes. Improvement in operating ratio is also a positive. The sluggish performance of its automotive units is, however, concerning.
Regulated Operations, Expanding Assets Aid Dominion (D)
The Zacks analyst believes Dominion continues to gain from expanding its transmission and distribution lines. Regulated operations also providing stability to its performance.
EQT Corp's (EQT) Utica Focus Offsets High Exploration Costs
The Zacks analyst believes that EQT's strong focus on the natural gas-rich Utica shale play will create long-term value for stockholders.
ResMed (RMD) Plagued by Pricing Pressure & Rising Costs
The Zacks analyst is concerned about the growing pricing pressure that ResMed is facing in the United States and Europe.
MGM Resorts (MGM) Rides on MGM Cotai, Competition Stiff
The Zacks analyst is encouraged by MGM Resorts' revenue growth largely derived from the recently opened MGM Cotai.
New Upgrades
Acquisitions, Higher Rates Aid Associated Banc-Corp (ASB)
The Zacks analyst believes that Associated Banc-Corp's inorganic growth strategy along with higher interest rates, and solid loan and deposit growth will continue supporting its profitability.
Applied Industrial (AIT) to Grow on Robust Industrial Demand
Per the Zacks analyst, sturdier industrial sales, FCX buyout and operational efficacy will boost Applied Industrial's near-term profits. The company has also raised earnings view for fiscal 2018.
Loan Growth Supports Cullen/Frost (CFR), Capital Level Solid
As per the Zacks analyst, organic growth remains a key strength at Cullen/Frost. Higher revenues reflect improving loan and deposit balances. Further, strong capital base is a favorable factor.
New Downgrades
SG&A Costs & Currency Translation Effects Hurt Honda (HMC)
Per the Zacks analyst, increased SG&A expenses and unfavorable foreign currency effects hurt Honda's profitability. Also, operating profit is likely to decline further in fiscal 2019.
Higher Costs, Rising Rates Hurts New York Community (NYCB)
Per the Zacks analyst, New York Community's escalating operating cost base remains a headwind. Also rising interest rates may not benefit the company due to its liability sensitive balance sheet.
Loew's (L) Growth Dragged by Soft Diamond Offshore Results
Per the Zacks analyst, challenging global offshore drilling market, lower contracted dayrates and contract drilling revenues which pressurize Diamond Offshore, in turn weigh on Loews growth prospects.
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Time Warner Inc. (TWX): Free Stock Analysis Report
Northrop Grumman Corporation (NOC): Free Stock Analysis Report
LyondellBasell Industries N.V. (LYB): Free Stock Analysis Report
Honda Motor Co., Ltd. (HMC): Free Stock Analysis Report
Bristol-Myers Squibb Company (BMY): Free Stock Analysis Report
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
