Top Research Reports for Citigroup, Qualcomm and Aetna

Thursday, November 2, 2017

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 Citigroup (C), Qualcomm (QCOM) and Aetna (AET). 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 >>>

Citigroup shares have outperformed the Zacks Major Banks industry over the last one year, gaining +53.6% vs +40%. This price performance is backed by impressive earnings surprise history. The company has surpassed expectations for earnings in all the trailing four quarters. Third-quarter 2017 results reflected lower expenses and higher revenues. However, weak fixed income market revenues and elevated costs of credit were undermining factors.

The Zacks analyst thinks the company’s restructuring and streamlining efforts, strategic investments in core business and expense management will likely support profitability going forward. Moreover, expansion of wealth management business in Australia will act as a tailwind. Yet several issues, including litigation burden, create apprehension. Also, in spite of rising rates, margins are under pressure, due to persistent decline in the company’s legacy holdings portfolio.

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

Shares of Qualcomm have gained +4.4% over the last three months vs. the -4% decline for the Zacks Wireless Equipment industry. Qualcomm posted strong fourth-quarter 2017 financial results with the shipment of 220 million CDMA-based MSM chipsets. The company achieved a 5G data connection with the Snapdragon X50 5G modem chipset on 28GHz mmWave spectrum. Qualcomm is teaming up with Verizon and Novatel Wireless for 5G NR mmWave technology trial. This marks Qualcomm’s leadership in 5G, chipset market and mobile connectivity.

Further, it is extending cash tender offer for its pending NXP Semiconductor deal. Qualcomm has launched Mesh Networking Platform and is planning to buy Scyfer B.V. to boost its Artificial Intelligence Research. However, the company continues to receive charges for unfair business practices and licensing royalty payments. Aggressive competition in the mobile phone chipset market remains a woe.

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

Aetna’s shares outperformed the Zacks Health Maintenance Organization industry year to date, increasing +39.4% vs. a gain of +34.4%. Aetna’s third-quarter earnings surpassed the expectations and grew year over year, driven by strong underwriting margin performance, disciplined pricing, a focus on high quality care management, and a decline in medical cost.

The Zacks analyst expects the company to witness long-term growth from its Government business and International expansion. Its cost-reduction initiatives will aid margins. The sale of its Group Life and Disability business will help it to focus on core growth areas.

Following strong third-quarter results, Aetna raised its earnings guidance, cementing investors' confidence in it. Aetna has, however, been incurring losses in its public exchange business and has been exiting exchanges. Furthermore, its membership growth remains under pressure. Increasing medical benefit ratios are also likely to hurt margins.

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

Other noteworthy reports we are featuring today Honda (HMC), Ecolab (ECL) and Electronic Arts (EA).

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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

Focus on Core Operations Aid Citigroup (C), Legal Woes Linger

Legal Disputes Weigh on Qualcomm (QCOM), Chipset Sales Aid

Medicare Business Aids Aetna (AET), Low Membership Hurts

Featured Reports

Capital Plans Aid Public Service Enterprise (PEG) Amid Huge Debt

Per the Zacks analyst, strong investments to boost its energy infrastructure will primarily drive Public Service Enterprise.

Unum Group (UNM) to Grow on Solid Persistency & Sturdy Sales

Per the Zacks analyst, Unum Group is poised for growth on the back of improving premiums driven by solid persistency levels and sturdy volume of sales.

C.H. Robinson (CHRW) Buoyed by Volume Growth Amid High Costs

The Zacks analyst appreciates the overall volume growth which is aiding the top line.

Honda (HMC) Grows on Vision 2030 Plan, Vehicle Launches

Per the Zacks analyst, Honda's Vision 2030 strategy will enable it to focus on electric and self-driving vehicles.

Better Pricing & Global Institutional Unit Aid Ecolab (ECL)

The Zacks analyst is bullish on Ecolab's Global Institutional unit, thanks to growth in the Specialty & Healthcare business.

Electronic Arts (EA) to Benefit from Growing Digital Sales

Per the Zacks analyst, increasing digital sales especially from live services along with the strength of its franchises will continue to boost EA's top line.

Fiserv (FISV) Benefits from Expanding DNA & Zelle Clientele

Per the Zacks analyst, Fiserv is benefiting from the increasing adoption of DNA, Zelle and other digital banking solutions among the banks and credit unions.

New Upgrades

Masimo (MASI) Banks on SET Pulse Oximetry for Growth

The Zacks analyst is bullish on Masimo's SET Pulse Oximetry business to drive growth over the long run.

Newfield's (NFX) Oil-Rich Anadarko Assets to Drive Growth

The covering analyst believes that Newfield's strong focus on crude shale plays in the Anadarko Basin will drive oil production.

WellCare Health's (WCG) Top Line Grows on Premium Income

Per the Zacks analyst, WellCare Health's consistent revenue growth has been significantly backed by the increasing level of premiums.

New Downgrades

Capacity Overexpansion & High Costs Hurt Southwest (LUV)

The Zacks analyst is concerned about capacity expansion outpacing traffic growth at Southwest. High labor and fuel costs are also likely to limit bottom-line growth.

EnerSys (ENS) Hit by Low Reserve Power Sales, Cost Inflation

The Zacks analyst thinks that reduced demand for reserve power products and escalating prices of major inputs such as lead would continue to dent EnerSys' results in the upcoming quarters.

Input Costs, Interest Expenses to Dent Avery's (AVY) Margins

Per the Zacks analyst, Avery Dennison's margins in the near term will bear the brunt of rising raw material costs and higher interest levels as result of the Yongle and Finesse acquisitions.

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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
 
Honda Motor Company, Ltd. (HMC) : Free Stock Analysis Report
 
Ecolab Inc. (ECL) : Free Stock Analysis Report
 
Electronic Arts Inc. (EA) : Free Stock Analysis Report
 
Citigroup Inc. (C) : Free Stock Analysis Report
 
Aetna Inc. (AET) : Free Stock Analysis Report
 
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