Top Analyst Reports for Home Depot, Bristol-Myers & Costco

Friday, October 5, 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 Home Depot (HD), Bristol-Myers (BMY) and Costco (COST). 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 Home Depot’s shares have gained +19.9% over the past year, marginally underperforming the Zacks Retail Building Products industry’s +20.9% increase. The Zacks analyst thinks that this performance is attributable to its five-year long trend of beating earnings estimates, which continued in second-quarter fiscal 2018.

Moreover, sales reverted to a positive surprise trend after a miss in the last-reported quarter. Results gained from a rebound in the seasonal business that impacted sales in the fiscal first quarter and the solid execution. Further, its relentless focus on affording innovative products, boosting interconnected customer experience and driving productivity seems to be paying off. A steady housing market recovery and strong customer demand also remain tailwinds.

Backed by the solid performance in the first half of fiscal 2018, the company raised the earnings and sales forecast for fiscal 2018. However, commodity cost inflation in various categories, including rising raw material and transportation costs as well as recently enacted tariffs are likely to pressure margins.

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

Shares of Buy-ranked Bristol-Myers have underperformed the Zacks Large Cap Pharmaceuticals industry year to date, increasing +1.8% vs. a gain of +7.2%. However, Bristol-Myers' blockbuster immuno-oncology drug Opdivo continues to maintain momentum. Opdivo’s performance is being boosted by the uptake in new indications, first line renal cell and adjuvant melanoma.

Several label expansion applications for Opdivo are under review in the United States and Europe. The drug was recently approved for small cell lung cancer in the United States and melanoma in Europe.  Potential approval in other indications will further boost the prospects of this blockbuster drug.

Eliquis is expected to drive further growth in 2018 driven by increases in market share in the novel oral anticoagulant (NOAC) market. The label expansion of other drugs like Sprycel and Empliciti also bode well for the company. 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 >>>).

Buy-ranked Costco’s shares have outperformed the Zacks Discount Retail industry over the past six months, gaining +25.9% versus the industry's +19.2% increase. Costco continues to be one of the dominant retail wholesalers based on the breadth and quality of merchandise offered.

The Zacks analyst thinks the stock has been gaining from sturdy comps performance and upbeat results. Notably, comps for fourth-quarter fiscal 2018 advanced 9.5% year over year, while revenues improved 5%. In fact, this marks the company’s sixth consecutive revenue beat.

Undoubtedly, the robust performance indicates that the company’s growth efforts have been fueling traffic across both the online and brick-and-mortar platforms. Moreover, the company is augmenting merchandise offerings and delivery services to further boost e-commerce sales.

However, lower core merchandise margins have been weighing on Costco’s gross margin. Further, rising SG&A expenses, stiff competition and unfavorable currency changes continue to pose threats.

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

Other noteworthy reports we are featuring today include Raytheon (RTN), Ecolab (ECL) and Ameriprise Financial (AMP).

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>>

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

Enhanced Delivery Options to Boost Home Depot's (HD) Sales

Opdivo Label Expansion Fuels Growth For Bristol-Myers (BMY)

Solid Comps Run to Continue Driving Costco's (COST) Top Line

Featured Reports

Global Institutional Unit Aids Ecolab (ECL), Competition Rife

Strength in the Global Institutional segment is likely to aid Ecolab's top line in the quarters to come. However, the Zacks analyst is apprehensive about cutthroat competition in the MedTech space.

Restructuring Efforts Aid Ameriprise's (AMP) Revenue Growth

Per the Zacks analyst, Ameriprise is well poised for top-line growth given its strategic restructuring efforts and a well-diversified portfolio. Its capital deployment activities also seem impressive.

Robust Product Pipeline & Partnerships Aids Microchip (MCHP)

Per the Zacks analyst, Microchip's expanding product portfolio, robust demand for microcontrollers and collaboration with Amazon Web services will drive top-line growth.

Growing Demand, Cost Cuts To Aid International Flavors (IFF)

Per the Zacks analyst, International Flavors & Fragrances will benefit from growing demand in flavors and fragrances markets, particularly in emerging markets as well as its cost cutting efforts.

MGIC Investment (MTG) Gains from Higher Insurance in Force

Per the Zacks analyst, improvement in insurance in force, driven by increase in new business, will continue to boost MGIC Investment's top line.

Improving Sales, Solid Persistency Aids Unum Group (UNM)

Per the Zacks analyst, Unum is set to benefit from improving premiums on better sales trends, solid persistency and favorable risk results.

Rite Aid's (RAD) Standalone Strategy Boosts Top Line

Per the Zacks analyst, Rite Aid strives to capitalize on growth potential through its standalone strategy.

New Upgrades

Foreign Military Contracts, Rising Demand Aids Raytheon (RTN)

Per the Zacks analyst, Raytheon enjoys solid order inflows from overseas customers courtesy its combat-proven defense products. Rising demand from Gulf and Asia-Pacific is also a key revenue driver.

Darden (DRI) Rides on Sales-Building & Cost-Cutting Efforts

Per the Zacks analysts, Darden's sales boosting initiatives like developing core menu and technology-driven moves are expected to boost the top line. The company's cost control efforts also bode well.

Robust Used-Car Market & Store Expansion Aid CarMax (KMX)

Per the Zacks analyst, improved store sales & digital initiatives are aiding CarMax's comparable-store used vehicle sales. The rise in sales is getting complemented by aggressive store expansion.

New Downgrades

Stiff Competition, Generic Threats a Concern for AMAG (AMAG).

Per the Zacks analyst, the company's drug Feraheme currently competes with IV iron replacement therapies as well as their generic versions which could limit sales for the drug.

Higher SG&A Expenses Weigh on Hibbett's (HIBB) Margins

Per the Zacks analyst, higher SG&A expenses have been taking a toll on Hibbett's operating margin, which remains a concern in fiscal 2019. This is hurting the company's overall profitability as well.

Promotional Discounts & Offers Hurt America Movil (AMX)

Per the Zacks analyst, America Movil is striving hard to increase its smartphone sales through promotional discounts and subsidized offers, which are hurting its margins and overall profitability.

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
 
Raytheon Company (RTN) : Free Stock Analysis Report
 
The Home Depot, Inc. (HD) : Free Stock Analysis Report
 
Ecolab Inc. (ECL) : Free Stock Analysis Report
 
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
 
Bristol-Myers Squibb Company (BMY) : Free Stock Analysis Report
 
Ameriprise Financial, Inc. (AMP) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research