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Research Daily

Friday, August 23, 2019

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features updated research reports on 16 major stocks, including U.S. Bancorp (USB), Duke Energy (DUK) and Glaxo (GSK). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

U.S. Bancorp’s shares have outperformed the Zacks Major Banks industry over the past three months, gaining +1.9% vs. a decline of -1.4%. Further, the company possesses an impressive earnings surprise history, having beaten expectations in three of the trailing four quarters.

The company’s second-quarter 2019 results reflect elevated interest and fee income, partly mitigated by higher costs and provisions. The Zacks analyst thinks U.S. Bancorp will likely get support from its solid business model, core franchise, relatively higher interest rates and diverse revenue streams.

Further, strategic acquisitions and rising loans and deposit balances have strengthened the company's balance sheet. However, escalating costs due to its ongoing investments in technology and likely increase in legal expenses remain concerns. Also, significant exposure to commercial loans remains a headwind for the company.

(You can read the full research report on U.S. Bancorp here >>>).

Shares of Duke Energy have outperformed the Zacks Electric Power industry in the past year, gaining +12.2% vs +12.1%. Duke Energy ended second-quarter 2019 on a solid note, with both earnings and revenues exceeding expectations. It invests heavily in infrastructure and expansion projects. It expects to invest about $37 billion in its overall growth projects in the 2019-2023-time frame.

The Zacks analyst thinks this investment plan will drive earnings base growth in its combined electric and gas businesses by approximately 6%, over the next five years. However, the company already has a notable long-term debt of $54.3 billion as of Jun 30, 2019, compared with $51.1 billion at 2018 end.

Such massive debt levels can turn out to be a major headwind for the company, going forward. Moreover, cleaner energy generation may lead Duke Energy to incur high environmental compliance costs, which may weigh on its bottom line.

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

Glaxo’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry year to date, gaining +8.6% versus the industry’s decline of -1.2%. Glaxo’s earnings and sales beat estimates in Q2. The Zacks analyst thinks the company’s three newest products — Trelegy Ellipta, Shingrix and Juluca — are doing well, particularly Shingrix.

These products coupled with restructuring in the Consumer Health unit have strengthened Glaxo’s competitive position. We are encouraged by the company’s initiatives to focus on its oncology pipeline.

However, stiff competition, genericization and pricing pressure on key drugs in the Pharma segment are hurting sales. Particularly, pricing pressure and competitive dynamics are hampering sales of Glaxo’s respiratory products.

Importantly, a generic version of its top-selling drug Advair has been launched, which is significantly eroding the drug’s sales. Also, competitive pressure on HIV drugs is rising in 2019.

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

Other noteworthy reports we are featuring today include Ross Stores (ROST), Keysight (KEYS) and Xylem (XYL).

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 Note: Our Director of Research 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>>>

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