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Top Research Reports for Amgen, Cisco & Berkshire Hathaway

Mark Vickery

Thursday, September 12, 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 Amgen (AMGN), Cisco (CSCO) and Berkshire Hathaway (BRK.B). 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 >>>

Amgen’s shares have outperformed the Zacks Biomedical and Genetics industry on a year-to-date basis (0.6% vs. -1.4%). The Zacks analyst thinks that while Amgen’s newer drugs — Prolia, Xgeva, Blincyto, Kyprolis — will drive sales, biosimilar and brand competition for its legacy products will create pressure on sales in the second half.

Meanwhile, uptake of key drug, Repatha, has been slow due to payer restrictions. However, recently launched products, including Aimovig and Evenity, biosimilars and international expansion provide incremental growth opportunities.

Amgen is also progressing with its pipeline. In the past five years, Amgen has launched nine products, including two in new therapeutic areas. Amgen boasts a strong biosimilars pipeline, which could be an important long-term growth driver. The company’s restructuring plan is making it leaner and more cost efficient. Amgen’s shares have outperformed the industry so far this year.

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

Shares of Cisco have lost 4.9% in the past six months, outperforming the Zacks Computer Networking industry’s fall of 5.2%. The Zacks analyst believes that Cisco is benefiting from a solid security business. Strong contribution from Infrastructure Platforms and applications is a positive.

Moreover, order strength and improving traction of the subscription-based business model are tailwinds. Further, a strengthening collaboration portfolio, which includes Webex Teams, bodes well. Additionally, the acquisitions of Voicea and CloudCherry hold promise. Notably, shares of the company have outperformed the industry in the past year.

However, weakness in service provider business in China remains a concern. Further, stiff competition from Arista and Juniper in switching and routing verticals is likely to create pricing pressure and impact profitability. Also, increasing investments in product enhancements are likely to limit margin expansion at least in the near term.

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

BRK.B’s shares have gained 2.9% over the past six months, outperforming the Zacks Insurance - Property and Casualty industry’s rise of 2.5%.

The Zacks analyst believes that Berkshire Hathaway’s inorganic growth story remains impressive with strategic acquisitions. A strong cash position supports earnings-accretive bolt-on buyouts. Demand for utilities is expected drive earnings growth. Continued insurance business growth also increases float. Its non-insurance businesses are delivering improved results. A sturdy capital level provides further impetus.

However, exposure to catastrophe loss remains a concern as its property and casualty insurance business generates maximum return on equity. Huge capital expenses due to railroad operations pose concerns.

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

Other noteworthy reports we are featuring today include Eaton (ETN), T. Rowe Price (TROW) and McKesson (MCK).

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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

Amgen (AMGN) Counts on New Drugs to Drive Top-line Growth

Security Business Aids Cisco (CSCO) Despite China Exposure

Solid Insurance Business Aid Berkshire (BRK.B), Cat Loss Ail

Featured Reports

Extensive Market Reach, Product Innovation Aid Eaton (ETN)

Per the Zacks analyst Eaton's presence in around 175 countries across the globe and its consistent research and development aiding it to churn out new products is boosting performance.

Passenger Revenues Buoy Alaska Air (ALK) Amid High Costs

The Zacks analyst is impressed with Alaska Air's solid passenger revenues (up 4% in first-half 2019) due to solid demand for air travel.

Action 2020 to Aid ArcelorMittal (MT) Amid Trade Tensions

While U.S.-China trade tensions may hurt some of the company's key markets including automotive, it should gain from efforts to boost margins through the Action 2020 initiative, per the Zacks analyst.

Medical-Surgical Unit Aids McKesson (MCK), Pricing Ails

Per the Zacks analyst, robust Medical-Surgical Solutions unit, fueled by growth in the Primary Care and Extended Care businesses, continues to boost McKesson.

Focus on Hospitality, New Galleries To Boost RH's (RH) Sales

Per the Zacks analyst, the company's core RH business, solid performance of new galleries (mainly RH New York), along with continued expansion of RH Hospitality will drive growth.

Skechers (SKX) Robust International Business to Drive Sales

Per the Zacks analyst, Skechers' international wholesale business remains a key sales driver.

TripAdvisor (TRIP) Non-Hotel Drives Growth, Expense A Concern

The Zacks analyst believes that TripAdvisor's growth in non-hotel business and expanding user base are positives. However, higher expenses & weakness in the Hotel business remain concerns.

New Upgrades

Strong C&P Order Inflows to Boost National Oilwell (NOV)

The Zacks analyst believes that the significant improvement in order inflows for National Oilwell's Completion & Production (C&P) Solutions unit will deliver impressive revenue growth.

Ciena (CIEN) Rides High on Holistic Growth Initiatives

Per the Zacks analyst, the buyout of Packet Design has expanded Ciena's Blue Planet software business and network capabilities with critical new features to support multilayer multivendor networks.

Growth in Europe to Keep Driving Guess?' (GES) Top Line

Per the Zacks analyst, Guess? is gaining from solid business progress in Europe. Management continues to invest in this region, wherein it expects revenues to rise high-single digits in fiscal 2020.

New Downgrades

Weak Store Traffic to Weigh on Kirkland's (KIRK) Performance

Per the Zacks analyst, Kirkland's is reeling under weak comps, due to low traffic in brick-and-mortar stores. Such trends are likely to persist, which led management to trim fiscal 2019 earnings view.

Elevated Expenses and FX Movements Hurt T. Rowe Price (TROW)

Per the Zacks analyst, over dependence on investment advisory fees which can be adversely affected owing to market fluctuations and FX translations is a concern. Also, high costs act as a headwind.

Competition & China Exposure to Hurt ON Semiconductor (ON)

Per the Zacks analyst, ON Semiconductor is affected by stiff competition and weakness in majority of end-markets. Further, the U.S.-China trade war and Huawei headwinds remain major concerns.

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T. Rowe Price Group, Inc. (TROW) : Free Stock Analysis Report
McKesson Corporation (MCK) : Free Stock Analysis Report
Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
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