Top Research Reports for Disney, Caterpillar & MetLife

Monday, June 11, 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 Disney (DIS), Caterpillar (CAT) and MetLife (MET). 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 >>>

Disney’s shares have lost -3.2% year to date, underperforming the Zacks Media Conglomerates industry’s -1.6% decline in that same time period. Disney’s impressive second-quarter fiscal 2018 results benefited from continuing strength at Parks & Resorts segment and stupendous success of Marvel title Black Panther, which were enough to mitigate another dismal performance from ESPN segment.

Parks & Resorts gained from significant visitor growth, increased per capita spending and shift in the timing of the Easter holiday. However, higher programming costs negatively impacted ESPN’s profitability. The Zacks analyst thinks continued subscriber loss remains a concern for the division.

Additionally, higher spending on ESPN+ is likely to hurt profitability. Nevertheless, Disney’s scintillating slate of movie titles, Avengers: Infinity War’s impressive collections and strong book rates at Parks & Resorts are positive developments that will help the stock to rebound in the rest of fiscal 2018.

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

Shares of Strong Buy-ranked Caterpillar have gained +46.4% over the past year, outperforming the Zacks Construction and Mining industry which has increased +45.1% over the same period. Driven by strong order rates, increasing backlog, positive economic indicators Caterpillar expects adjusted EPS at $10.25-$11.25 for 2018, the mid-point of which reflects year-over-year rise of 56%.

The Zacks analyst thinks the Construction segment will benefit from infrastructure development in China and continued demand improvement in North American residential, non-residential and infrastructure markets. Rising commodity prices will drive Resource Industries and Energy & Transportation’s revenues. Cost cutting efforts and additional investments in expanded offerings and services will drive growth.

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

Buy-ranked MetLife’s shares have lost -10.9% over the last year, underperforming the Zacks Multi-Line Insurance industry, which has declined -2% over the same period. However, MetLife’s efforts to streamline business, only to focus on core business, are really impressive, according to the Zacks analyst.

Its revenues grew in 2017 after declining for two years and the trend is likely to continue in 2018. Its strong international operations and disciplined capital management should drive long-term growth.

The stock has seen the Zacks Consensus Estimate for current-year earnings being revised upward over the last 60 days. Nevertheless, exposure to catastrophe losses and investment in efficiency programs will put pressure on margins.

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

Other noteworthy reports we are featuring today include Becton, Dickinson (BDX), Celgene (CELG) and Northrop Grumman (NOC).

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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

Disney (DIS) to Benefit from Strong Slate of Movie Titles

Improving End-Markets, Cost Cuts to Drive Caterpillar (CAT)

Business Restructuring, Revenue Growth Aids MetLife (MET)

Featured Reports

Solid Growth in BD Medical Drives Becton, Dickinson (BDX)

Becton, Dickinson has been riding on consistent growth of its major segment, BD Medical. The Zacks analyst is bullish about the company's strategic buyouts.

Revlimid, Pomalyst Fuel Celgene (CELG) Amid Pipeline Setback

Per the Zacks analyst, Revlimid should drive growth for Celgene. The company is making strategic acquisitions to boost its pipeline given the recent setbacks to lessen dependence on Revlimid.

Phillips 66's (PSX) Debt Load Offset by Chemical Unit Focus

The Zacks analyst believes that concerns regarding Phillips 66's rising debt load will be offset by the company's focus on more profitable business units like Midstream and Chemicals.

Fleet Upgrade Buoys Allegiant (ALGT) Amid High Fuel Costs

The Zacks analyst likes the company's efforts to modernize its fleet. High fuel costs are, however, limiting bottom-line growth. Safety-related issues also raise concerns.

Cosan's (CZZ) Healthy Businesses to Negate Costs Headwinds

Per a Zacks analyst, Cosan's solid segmental businesses, including that of Raizen Energia and Combustiveis, Comgas, Moove and Rumo, will offset high costs and debts.

FireEye (FEYE) Gains on Buyouts & Business Model Shift

The Zacks analyst thinks that FireEye's recovery is on track with its business model shift, product refreshes, buyouts and cost optimization moves, as evident from its improving top and bottom lines.

Yum! Brands (YUM) Grows on Re-Franchising, High Costs Hurt

The Zacks analyst believes that Yum! Brands' refranchising efforts are facilitating EPS growth. However high costs associated with restaurant operations remains a concern.

New Upgrades

Focus on Investment, Seasonality to Aid NCI Building (NCS)

Per the Zacks analyst, NCI Building's investment in automation and process innovation will assist margins. It will also benefit in the second half from favorable weather conditions for construction.

Orbital Buy and Focus on ISR Wing to Drive Northrop (NOC)

Per the Zacks analyst Northrop will gain from the acquisition of Orbital, which expands its product portfolio. Rising need for intelligence equipment will boost demand for Northrop's ISR technologies.

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.

New Downgrades

Higher Raw Material Costs Weigh on PPG Industries (PPG)

The Zacks analyst is worried about PPG Industries' exposure to raw materials cost pressure. Raw material inflation is expected to continue through Q2, which may affect its margins.

Competition & Weak Fitness Demand Hurts Fitbit (FIT)

Per the Zacks analyst, mounting competition from Apple, Garmin and Xiaomi in the wearables space and weak demand for its new fitness products continues to dampen Fitbit's sales and income.

Smartphone Weakness & Higher Expenses Hurt Amkor (AMKR)

Despite Amkor's gains through acquisitions, the Zacks analyst believes that weakness in the smartphone market, higher expenses and integration issues may deter the company's growth.

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Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
 
MetLife, Inc. (MET) : Free Stock Analysis Report
 
The Walt Disney Company (DIS) : Free Stock Analysis Report
 
Celgene Corporation (CELG) : Free Stock Analysis Report
 
Caterpillar Inc. (CAT) : Free Stock Analysis Report
 
Becton, Dickinson and Company (BDX) : Free Stock Analysis Report
 
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