Top Stock Reports for Berkshire Hathaway, salesforce & Danaher

Friday, June 14, 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 Berkshire Hathaway (BRK.B), salesforce (CRM) and Danaher (DHR). 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 >>>

Berkshire Hathaway’s shares have underperformed the Zacks Insurance - Property and Casualty industry in the past six months (+3.7% vs. +7.1%). However, the Zacks analyst thinks the company is poised for growth over the long term on its sturdy insurance business.

The company’s inorganic growth story remains impressive with strategic acquisitions. A strong cash position supports earnings-accretive bolt-on buyouts. Demand for utilities is expected to rise in the future and drive earnings growth.

Continued insurance business growth also fuels increase in float. The company’s non-insurance businesses are also delivering improved results supporting overall performance.

A sturdy capital level provides further impetus. However, Berkshire Hathaway’s exposure to catastrophe loss remains a concern as its property and casualty insurance business generates maximum return on equity. Also, huge capital expenses due to railroad operations are worrying.

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

Shares of salesforce have gained +10.1% year to date, underperforming the Zacks Computer Software industry, which has gained +28.6% over the same period. However, salesforce's first-quarter fiscal 2020 results gained from solid growth across all its four major cloud offerings.

The company is benefiting from deal wins in the international market. Rapid adoption of its diverse cloud offerings, given an upsurge in demand for digital transformation, is the constant key catalyst. Strengthening relationships with cloud companies like Amazon, Google and IBM are a positive.

Additionally, strategic acquisitions like MuleSoft, Datorama and Cloudcraze are helping it deliver a strong uptick. Nonetheless, stiff competition from Oracle and Microsoft is a concern.

Unfavorable currency fluctuations persist as a key headwind. Besides, increasing investments on international expansion and data centers are an overhang on near-term profitability.

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

Danaher’s shares have gained +8.6% over the past three months, outperforming the Zacks Diversified Operations industry, which has increased +1% over the same period. The Zacks analyst thinks sturdier demand for products, Danaher Business System ("DBS") implementation and shareholder-friendly policies will likely bolster profitability going forward.

Also, it anticipates that the acquisition of General Electric's BioPharma business will boost its biologics workflow solutions business. Also, the divestiture of the dental business will improve its competency. However, rising cost of sales and unfavorable movements in foreign currencies might continue to restrict Danaher's growth.

For 2019, the company lowered adjusted earnings per share guidance from $4.75-$4.85 to $4.72-$4.80, primarily reflecting dilutive impact of funds raised for the BioPharma buyout. Earnings estimates for 2019 have improved in the past 60 days.

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

Other noteworthy reports we are featuring today include Brown-Forman (BF.B), Halliburton (HAL) and American Airlines (AAL).

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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

Berkshire (BRK.B) Set to Grow on Sturdy Insurance Business

salesforce (CRM) Banks on Buyouts, International Growth

Danaher (DHR) to Gain From Solid Product Line, Acquisitions

Featured Reports

Improving Demand to Drive Caterpillar (CAT), Costs Ail

Per the Zacks analyst, improving demand in end markets, cost cutting efforts and investment in digital initiatives like e-commerce will boost Caterpillar's results despite higher raw material costs.

Investment in Brands Portfolio to Power Brown-Forman (BF.B)

Per the Zacks analyst, Brown-Forman's investments in the brands portfolio, including broadening of the Jack Daniel's family of brands and growing the super-premium spirits category, should aid growth.

International & Offshore Rebound to Boost Halliburton (HAL)

The Zacks analyst believes rising international activity and higher offshore spending should aid Halliburton but is concerned about pricing pressure in North American hydraulic fracturing services.

Science Applications (SAIC) Rides on Contract Wins, Buyouts

Per the Zacks analyst, Science Applications is benefiting from new contracts supporting IT modernization. Moreover, strategic acquisitions like Engility bode well for growth.

Expansion Plans Aids Ormat (ORA), Operational Risks Hurt

Per the Zacks analyst, Ormat bears a solid opportunity to expand in the global geothermal energy market.

Focus on Hospitality Aids RH (RH), Higher Tariff Hurts

Per the Zacks analyst, expansion of hospitality and the extension of the RH brand bode well for RH.

Hospital Franchise Drive Mallinckrodt (MNK), Lawsuits Hurt

Per the Zacks analyst, Mallinckrodt strong hospital portfolio (Inomax and Ofirmev) drive growth for the company.

New Upgrades

Cboe Global (CBOE) Set to Grow on Improved Trading Volumes

Per the Zacks analyst, Cboe Global's trading volume growth has led to an increase in transaction fee and coupled with core competencies is helping the company to retain the organic growth momentum.

Ciena (CIEN) Rides on Technology Leadership, Global Strength

Per the Zacks analyst, Ciena is poised to benefit from its technology leadership and diversified customer base in high-growth markets alongside favorable industry dynamics and competitive advantage.

Acquisitions, Increasing Assets Bolster Legg Mason (LM)

Per the Zacks analyst, Legg Mason's strong liquidity position keeps it well poised to grow through acquisitions.

New Downgrades

High Debts, 737 MAX Issues Hurt American Airlines (AAL)

The Zacks analyst is worried about its high debt levels. Flight cancellations due to the grounding of the Boeing 737 MAX jets are intensifying passengers' woes, which in turn, might affect revenues.

Lower Prices, Weak Chinese Demand Ail Steel Dynamics (STLD)

The Zacks analyst thinks that lower U.S. steel prices will dent the company's earnings. Weakening steel demand across construction and automotive markets in China is another concern.

Declining Orders & Deliveries to Hurt Toll Brothers (TOL)

Slower demand, higher incentives due to challenging weather and changes in mix are likely to impact home deliveries in fiscal 2019.

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Halliburton Company (HAL) : Free Stock Analysis Report
 
Danaher Corporation (DHR) : Free Stock Analysis Report
 
salesforce.com, inc. (CRM) : Free Stock Analysis Report
 
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
 
Brown-Forman Corporation (BF.B) : Free Stock Analysis Report
 
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
 
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