Friday May 26, 2017

Today's Research Daily features new research reports on 16 major stocks, including Visa (V), General Electric Company (GE) and GlaxoSmithKline plc (GSK). You can see all of today’s research reports here >>>

Visa shares have outperformed the Zacks Financial Transaction Services industry as well as MasterCard in the year-to-date period (Visa is up +21.7% vs. +17.8% gain for MA and +16.8% for the industry). Driving this momentum is the acknowledgement that Visa's brand, global network, and leading market share position it to be a key beneficiary of the secular global shift to electronic transactions. Initial concerns about a changing competitive landscape, large on account of new payment options, have also started receding. The company's strong results in recent quarters reflect this favorable backdrop. On the flip side, forex volatility, increased client incentives and global economic uncertainty are some of the headwinds (You can read the full research report on Visa here >>>).

General Electric shares have been laggards for a while now; the stock has underperformed the S&P 500 index in the year-to-date (-13.2% vs. +8.2%), trailing one year, 2 years or even 5-year periods. This has rattled long-term investors and made them skeptical of management plans to turn the conglomerate around. The stock was down following the Q1 earnings release and management's cautious commentary about the business outlook since then hasn't helped matters much. The Baker Hughes purchase should close soon, but management has been less than enthusiastic about that business' near-term outlook despite indications that activity levels may have bottomed in the oil patch already. As gloomy as all of this looks, we have acknowledge the limited downside risks at this stage, given the very attractive dividend (currently yielding a juicy 3.5%) and very reasonable valuation. The stock has historically traded in-line with the S&P 500 index, but currently trades at a big discount to the index. (You can read the full research report on General Electric here >>>).

GlaxoSmithKline shares have performed in-line with the Zacks Large Cap Pharmaceuticals industry over the year-to-date period, gaining +10.7% versus the industry’s +10.7% increase. Persistent challenges like stiff competition, genericization and pricing pressure along with slowing growth in emerging markets have been impacting the company’s performance. In particular, pricing dynamics and competitive pressure are hurting sales of its top-selling drug Advair. On the other hand, the Zacks analyst pointed out that performance of its new products as well as of those acquired from Novartis has been encouraging. Glaxo reported mixed Q1 results with earnings meeting the mark and sales beating the same (You can read the full research report on GlaxoSmithKline here >>>).

Other noteworthy reports we are featuring today include Merck & Co., Inc. (MRK), Morgan Stanley (MS) and Abbott Laboratories (ABT).

More Stock News: 8 Companies Verge on Apple-Like Run                                                              

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Sheraz Mian

Director of Research

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

Visa (V) Remains Well Placed to Outperform

General Electric (GE) has Become Serial Underperformer

Glaxo's (GSK) New Drugs Doing Well, Advair to Face Generics

Featured Reports

CSX Corp (CSX) Rides on Volume Growth, Cost Cut Measures

The Zacks analyst likes the improving coal scenario, which is aiding overall volumes at CSX. The company's efforts to check costs & reward shareholders also raise optimism.

Medtronic (MDT) Rides on Solid Results, M&A, Divestiture

Medtronic delivered another stellar quarter on balanced segmental performance. Per the Zacks analyst, innovations, acquisition and synergy are the growth drivers.

Marvell (MRVL) Well Poised to Gain from Strong 4G LTE Demand

Per the Zacks analyst, strong demand for the company's 4G LTE products and its current restructuring initiatives will be growth drivers.

MGM Resorts (MGM) Vegas Business Solid, VIP Market a Concern

Strong portfolio, focus on non-gaming activities, improving economy and tourism in Las Vegas should drive growth. Despite Macau revival, sustainability of revenues from the VIP market is a concern.

AIG's (AIG) Growth Plans on Track, Commercial Business Drags

Per the Zacks analyst, continued benefits of AIG's capital return, expense reductions, improved underwriting will lead to higher ROE; soft commercial business, exposure to catastrophe bothers.

Deere (DE) Rides on Cost Management, Broad Product Portfolio

Per the Zacks Analyst, Deere will gain from improving dairy market and political scenario in Brazil.

Cost control, Investments Drives Devon (DVN) Amid Competition

The Zacks analyst believes Devon Energy's cost cutting initiatives, systematic investments and improving commodity prices will help it to boost its performance amid rising competition.

New Upgrades

Merck's (MRK) New Drugs Keytruda/Zepatier to Drive Sales

The Zacks analyst says Merck's new drugs Keytruda and Zepatier should drive sales. In-fact, Keytruda's uptake in first line lung cancer and potential label expansion are catalysts for the stock in 2017.

Morgan Stanley (MS) Poised to Grow on Cost Saving Efforts

The Zacks analyst believes that Morgan Stanley's initiatives to control cost should continue to support bottom line growth. Also, the company's efforts to improve revenues are impressive.

Abbott (ABT) Progresses on St Jude Synergy and New Products

Per the Zacks Analyst, Abbott's ongoing integration and synergy achievement of St Jude is quite encouraging. Also the company's recent product launch and CE mark for devices pulled up its share price.

New Downgrades

Mylan (MYL) Under Pressure on EpiPen Woes and Advair CRL

Per the Zacks analyst, Mylan will remain under pressure as EpiPen sales decline due to competition and entry of generics. The CRL for generic Advair was also a huge setback given the market potential.

Lower New Business Revenues and Win Rate to Hurt CSRA (CSRA)

According to the Zacks analyst, CSRA's forecast of lower new business revenues as well as lower win rate will significantly hurt top-line growth in fiscal 2018.

ViaSat (VSAT) Hurt by High R&D Expenses, Seasonality Issues

Seasonality in demand and fast increasing R&D expenses at the Commercial Networks segment, in relation to ViaSat-3 payloads, are expected to hurt ViaSat's profits in the short term.

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