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Top Analyst Reports for General Electric, Anthem & Northrop Grumman

Mark Vickery
Top Analyst Reports for General Electric, Anthem & Northrop Grumman

Wednesday, June 5, 2019

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 General Electric (GE), Anthem (ANTM) and Northrop Grumman (NOC). 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 >>>

Outperform-rated General Electric’s shares have outperformed the Zacks Diversified Operations industry in the past six months (+29.8% vs. +8.5%). The Zacks analyst thinks company is poised to improve its competence on the back of its portfolio restructuring program. In sync with this, it intends to focus on three core businesses — Aviation, Power and Renewable Energy — and gradually exit all others.

General Electric believes that its solid Aviation segment, driven by strengthening services and military businesses, will boost revenues in the quarters ahead. Also, reduced quarterly dividend rate and reorganization in the Power business are likely to benefit results going forward.

Moreover, growing commercial presence in emerging markets will likely improve near-term profitability. In the past 60 days, the company's Zacks Consensus Estimate for earnings per share has been increased by 5.2% for 2019.

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

Shares of Anthem have outperformed the Zacks Medical Insurance industry in the past year (up +21.6% vs. -1.9%). The Zacks analyst thinks the company's prudent acquisitions and collaborations complement its organic growth. Its consistently growing top line paves the way for long-term growth.

A diverse product portfolio also helped it enhance its underwriting results. Its strong capital position backs effective capital deployment via share buybacks and regular dividends. A strong outlook for 2019 and growing membership instills investor's confidence in the company. Its first-quarter 2019 earnings of $6.03 per share, surpassed expectations by 2.9% and improved 11.5% year over year on the back of higher membership and expansion of its clinical and specialty services.

However, it has been suffering from high benefit costs and selling, general and administrative expenses. Rising levels of debt is another concern.

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

Northrop Grumman’s shares have outperformed the Zacks Aerospace Defense industry over the past six months, gaining +24.9% over the period versus the industry’s +5.6% increase. The Zacks analyst thinks that as a major U.S. defense contractor, Northrop Grumman continues to enjoy a strong position in the Air Force, Space & Cyber Security programs.

In a bid to boost its growth trajectory, Northrop Grumman completed the acquisition of rocket-maker Orbital ATK for $9.2 billion last year. Increasing international opportunities are expected to boost the company’s margin growth. Currently, the company is getting ready to move into full-rate production for Triton.

However, it continues to incur high operating expenses on account of increasing product costs. Such higher operating expenses tend to put downward pressure on its profit margins. Also, Northrop's EV/EBITDA ratio has remained above the broader sector’s EV/EBITDA ratio of 10.45.

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

Other noteworthy reports we are featuring today include Walgreens (WBA), State Street (STT) and Honda (HMC).

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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

Restructuring of Power Unit to Benefit General Electric (GE)

Strategic Initiatives Aid Anthem (ANTM), Rising Costs Hurt

Positive Budget to Aid Northrop (NOC) Amid Increasing Opex

Featured Reports

Cooper Companies (COO) Rides on Core CVI Amid Forex Woes

Per the Zacks analyst, strength in both Clariti and MyDay lenses continue to drive Cooper Companies' CVI segment. However, forex headwinds raise concerns.

Continental Resources (CLR) Banks on Oil-Rich Bakken Play

The Zacks analyst thinks Continental Resources will continue to grow its oil equivalent production volumes backed by strong foothold in the Bakken Shale play.

Strong Sensor Segment Aids DexCom (DXCM) Amid Competition

DexCom's Sensor, Transmitter and Receiver units have been key catalysts for growth of late. The Zacks analyst is apprehensive about cutthroat competition in the market for glucose monitoring devices.

Toll Brothers (TOL) Gains From Solid Demand, Rising Costs Hurt

Per the Zacks analyst, strengthening housing demand and solid land position are expected to generate higher revenues for Toll Brothers. Rising building materials and labor costs are key concerns.

Quanta (PWR) Rides on Electric Power Unit, Competition Hurts

Per the Zacks analyst, solid prospects in its Electric Power segment given more spending by electric utilities on grid modernization bode well. Stiff competition & project delays are key concerns.

Amicus' (FOLD) Galafold Shows Potential Amid Competition

Per the Zacks analyst, Amicus' drug Galafold has blockbuster potential. However, the company faces substantial competition.

ICF International (ICFI) Benefits from We are Vista Buyout

The Zacks analyst believes that the acquisition of We are Vista has strengthened ICF International's global marketing, technology, communications and digital services portfolios.

New Upgrades

Higher Rates, Solid Balance Sheet Support State Street (STT)

Per the Zacks analyst, higher rates and new business wins will aid State Street's top line. Driven by a solid balance sheet, it is expected to enhance shareholder value through capital deployments.

Revenue Growth & Diversification Aid Northern Trust (NTRS)

Per the Zacks analyst, focus on initiating new business against the backdrop of macroeconomic headwinds should bolster Northern Trust's revenues. Moreover, its diversified products are a tailwind.

Martin Marietta (MLM) Rides on Higher Construction Activity

The Zacks analyst thinks increased activity in the non-residential and residential markets will boost demand for Martin Marietta's products. Also, its string of acquisitions is encouraging.

New Downgrades

SG&A Costs & Currency Translation Effects Hurt Honda (HMC)

Per the Zacks analyst, increased SG&A expenses and unfavorable foreign currency effects are hurting Honda's profitability. Also, operating profit is likely to decline further in fiscal 2019.

Low Generic Deflation, Poor Volumes Ail Walgreens (WBA)

The Zacks analyst worries about Walgreens' same-store volume growth which is trending below expectations in pharmacies and front stores. Low generic deflation may hamper growth in the coming months.

High Input, SG&A Costs to Hurt Lamb Weston's (LW) Profits

Lamb Weston expects transportation, input and manufacturing costs to rise in fiscal 2019, wherein it also expects escalated SG&A expenses. Per the Zacks analyst, this is likely to weigh on profits.

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Walgreens Boots Alliance, Inc. (WBA) : Free Stock Analysis Report
State Street Corporation (STT) : Free Stock Analysis Report
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
Honda Motor Co., Ltd. (HMC) : Free Stock Analysis Report
General Electric Company (GE) : Free Stock Analysis Report
Anthem, Inc. (ANTM) : Free Stock Analysis Report
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