Thursday, October 17, 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 Johnson & Johnson (NYSE:JNJ) (JNJ), Boeing (BA) and Pfizer (PFE). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Johnson & Johnson’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry year to date (4.7% vs. 0.3%). The Zacks analyst thinks that J&J’s Pharma unit is faced with significant generic/biosimilar headwinds in 2019.
However, J&J’s Pharma unit is performing above-market levels supported by contribution from new drugs like Tremfya and successful label expansion of cancer drugs like Imbruvica and Darzalex and immunology drug, Stelara. J&J is also making rapid progress with its pipeline and line extensions. It has gained FDA approval for two new drugs in 2019, Balversa and Spravato. J&J’s shares have outperformed the industry this year.
Headwinds like biosimilar/generic competition and pricing pressure remain. J&J faces numerous lawsuits, which allege personal injuries to patients caused by the use of its products.
Shares of Boeing have lost 2% in the past six months against the Zacks Aerospace & Defense industry’s rise of 7.3%. The Zacks analyst believes that Boeing is the largest aircraft manufacturer globally in terms of revenues, orders and deliveries, and one of the major aerospace and defense contractors.
Its revenue exposure is spread across more than 90 countries. Boeing expects the commercial fleet to be fueled by sustained annual growth in commercial passenger traffic along with a big wave of retiring, old planes. Its proposed joint venture with Embraer is expected to strengthen its commercial business significantly.
However, the commercial business suffered a major setback due to lower 737 deliveries, following the 737 Max product line's grounding and subsequent costs associated with it. Consequently, its revenues, earnings and cash flow position were affected significantly.
Pfizer’s shares have lost 15.6% over the past three months against the Zacks Large-Cap Pharmaceuticals industry’s rise of 0.5%. The Zacks analyst believes that the Consumer Healthcare joint venture with Glaxo, the Array acquisition and the pending merger of Upjohn unit with Mylan (NASDAQ:MYL), if successful, will make Pfizer a smaller company with a diversified portfolio of innovative drugs and vaccines.
Pfizer expects continued strong growth of key brands like Ibrance and Eliquis and biosimilars to drive sales in the second half. However, currency headwinds, weak sales in the sterile injectables portfolio, pricing pressure and some recent negative product developments for Prevnar and Xeljanz are top-line headwinds. Pfizer has a positive record of earnings surprises for recent quarters.
Other noteworthy reports we are featuring today include Qualcomm (QCOM), Petrobras (PBR) and Mitsubishi UFJ Financial (MUFG).
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Per the Zacks analyst, Mitsubishi UFJ has been growing through acquisitions and focus on its business upgradation plan (2018-2021).
Per the Zacks analyst, Qualcomm retains a competitive edge with several technological achievements, novel portfolio and 5G system level solutions across sub-6, gigahertz and millimeter wave bands.
Petrobras' interests in Brazil's attractive pre-salt oil reservoirs should boost its earnings outlook. However, the Zacks analyst is concerned over the company's huge debt load of nearly $83 billion.
Per the Zacks Analyst, Northrop Grumman (NYSE:NOC)'s regular investments in growth projects bolsters its future prospects.
Huge inventory of premium drilling wells in the Eagle Ford shale will contribute to EOG Resources' oil production.
Per the Zacks analyst, disciplined investments in infrastructure projects and focus on renewable generation as well as expansion will strengthen Xcel Energy's existing operations.
Per the Zacks Analyst, Digital Realty's accretive acquisitions and development efforts augur well amid pick-up in demand for data centers.
Per the Zacks analyst, DISH's excellent customer service is improving retention. Also focus on acquiring and retaining subscribers that are profitable over the long term, is paying off.
Per the Zacks analyst, the increased monetization of digital streaming products and new channel launches in several markets are expected to boost Discovery's growth.
Per the Zacks analyst, Burlington Stores' off-price model, comparable sales performance and growth strategies reinforce its position. Management expects third-quarter comparable sales growth of 2-3%.
The Zacks analyst believes the sub-$55 oil price will make it difficult for Chevron to fund operations, making it dependent on asset sales. Weakness in its downstream unit is also a concern.
Per the Zacks analyst, lower demand in China and weakness in select business in the United States are likely to hurt Hyatt. Lingering political uncertainty in key operating regions remains a concern.
The Zacks analyst is worried about lackluster freight demand that is impeding Knight-Swift's growth. Moreover, high capital expenditures are denting the bottom line.
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