Mer­rill Lynch re­moves 2 blue chips from US 1 list

Financial Mirror (Cyprus) - - FRONT PAGE -

With just over a month left in 2016, many of the top com­pa­nies on Wall Street are mak­ing some changes to the lists of their high con­vic­tion stock picks for clients. With the mar­ket con­tin­u­ing to trade to near all-time highs, it makes sense to ex­am­ine the lists and make some changes as the rest of the year could have ad­di­tional volatil­ity. While the po­lit­i­cal cy­cle should quiet down with the elec­tion over, ris­ing in­ter­est rates could prove to be very volatile com­po­nent.

In a re­cent re­search note, an­a­lysts at Mer­rill Lynch made a big move by re­mov­ing two blue chips from the firm’s well­re­spected US 1 list of stocks to buy. The port­fo­lio man­agers re­moved a top phar­ma­ceu­ti­cal com­pany, and a big-time tech stock also comes out. We also re­view the three top-yield­ing div­i­dend stocks re­main­ing in the US 1 list.

This top phar­ma­ceu­ti­cal was re­moved from the US 1 list but re­mains rated Buy at the firm. Eli Lilly and Co. (NYSE: LLY) is a global health care com­pany with nu­mer­ous core prod­ucts in a num­ber of pri­mary-care phar­ma­ceu­ti­cal mar­kets. The com­pany gen­er­ates rev­enues from its phar­ma­ceu­ti­cal prod­uct and an­i­mal health seg­ments.

The prod­uct port­fo­lio in­cludes Zyprexa (for schizophre­nia and bipo­lar dis­or­der), Gemzar (pan­cre­atic can­cer), Evista (os­teo­poro­sis), Cym­balta (de­pres­sion), Cialis (erec­tile dys­func­tion), Strat­tera (at­ten­tion deficit hy­per­ac­tiv­ity dis­or­der), Er­bitux (can­cer) and Alimta (chemo­ther­apy). Eli Lilly also has a strong pres­ence in the di­a­betes mar­ket.

The com­pany posted third-quar­ter sales and earn­ings well be­low Wall Street’s expectations, prompt­ing shares to plum­met to a four-month low be­fore re­bound­ing. The stock is down al­most 10% on the year and of­fer­ing in­vestors an out­stand­ing en­try point. Share­hold­ers re­ceive a 3.05% div­i­dend. Mer­rill Lynch low­ered its price ob­jec­tive for the stock to $90 from $105, and the Wall Street con­sen­sus price tar­get is $97.05. Shares closed Mon­day at $67.20. semi­con­duc­tor busi­ness, QCT.

The an­a­lysts are bullish on the

The shares closed Mon­day at $67.10.

This com­pany has had an in­cred­i­ble run this year but is off over 10% in less than six weeks. AT&T Inc. (NYSE: T) is the world’s largest provider of pay TV, with TV cus­tomers in the United States and 11 Latin Amer­i­can coun­tries. In the U.S., the AT&T wire­less net­work has the na­tion’s self­de­scribed strong­est 4G LTE sig­nal and most re­li­able 4G LTE. The com­pany also helps busi­nesses world­wide serve their cus­tomers bet­ter with mo­bil­ity and highly se­cure cloud so­lu­tions. In­vestors re­ceive a 4.96% div­i­dend. The $46 Mer­rill Lynch price tar­get com­pares with the con­sen­sus price ob­jec­tive of $40.76. Shares closed Mon­day at $39.54.

The for­mer Coca-Cola En­ter­prises re­ported solid earn­ings, and merger ru­mors are start­ing to fly again as well. Coca-Cola Euro­pean Part­ners PLC (NYSE: CCE) is the lead­ing Western Euro­pean mar­keter, pro­ducer and dis­trib­u­tor of non­al­co­holic ready-to-drink bev­er­ages and one of the world’s largest in­de­pen­dent Coca-Cola bot­tlers.

In­vestors re­ceive a 2.27% div­i­dend. The $44.50 Mer­rill Lynch price tar­get is lower than the con­sen­sus tar­get of $44.83. The shares closed on Mon­day at $33.47.

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