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Top Analyst Reports for Amazon, 3M & Novartis

Mark Vickery
Top Analyst Reports for Amazon, 3M & Novartis

Thursday, April 4, 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 Amazon (AMZN), 3M (MMM) and Novartis (NVS). 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 >>>

Buy-ranked Amazon’s shares have outperformed the broader market in the past year (the stock is up +25.4% vs. the +8% increase for the S&P 500 as a whole). The Zacks analyst thinks Amazon continues to ride on its ecommerce dominance. Its aggressive retail strategies, distribution strength and robust Prime remain the key catalysts.

Moreover, rapid adoption of Prime owing to its customer benefits and strengthening grocery services is driving its top-line growth. Further, the company’s growing brick and mortar presence is a tailwind. Additionally, Amazon’s continued momentum in AWS remains a major positive. Increasing AWS regions and its growing adoption will continue to aid Amazon’s cloud dominance.

However, first-quarter 2019 revenue guidance remains disappointing. Further, rising cloud competition from the likes of Microsoft Azure and Google cloud is a significant headwind. Heavy investment in fulfillment centers is another concern.

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

Shares of 3M have increased +11.7% in the past three months, underperforming the Zacks Diversified Operations industry, which has gained +18.7% over the same period. The Zacks analyst thinks 3M stands to gain from efforts to innovate products, solid demand and portfolio restructuring moves. Its acquisition of the technology business of M*Modal is likely to strengthen the Health Information Systems business in the months ahead.

The company is also steadily improving its cash position. In addition to this, 3M is on track to boost its shareholder return over time. However, for 2019, the company lowered the earnings projection from $10.60-$11.05 to $10.45-$10.90 per share and net sales growth guidance from 2-4% to 1-4%.

Foreign currency translation is predicted to adversely influence sales by 1%. In addition, inflation in prices of major inputs and rising competitive pressures pose threats to near-term profitability. Also, the company looks overvalued compared with the industry.

(You can read the full research report on 3M here >>>).

Novartis’ shares have outperformed the Zacks Large-Cap Pharmaceuticals industry (+17.2% vs. +13%), in the past year. The Zacks analyst likes Novartis’ strong oncology portfolio which includes drugs like Afinitor, Exjade, Jakavi, Zykadia, Tasigna, Jadenu and an improved formulation of Exjade.

New drugs like Cosentyx and Entresto continue to boost performance, while legacy drugs face stiff competition. The biosimilars portfolio has also gained traction. For Novartis, 2018 was a challenging year, as it restructured its business to focus on becoming a core drug-focused company, powered by data and digital technologies.

However, the generic division, Sandoz, continues to face pricing pressure in the United States. The division also suffered a blow when the FDA issued a CRL to its generic, Advair Diskus. Meanwhile, the company plans to spin-off its eye-care unit, Alcon, into a new company. The uptake of Kymriah and Kisqali has been slow.

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

Other noteworthy reports we are featuring today include VMware (VMW), Schlumberger (SLB) and ICICI Bank (IBN).

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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

Amazon (AMZN) Banks on Growing AWS Adoption & Robust Prime

Health Care Business to Drive 3M's (MMM) Revenues

Cosentyx, Entresto, Fuel Novartis (NVS) As Sandoz Faces Hurdles

Featured Reports

VMware (VMW) Drives on Hybrid Cloud & SaaS, License Bookings

Per the Zacks analyst, VMware is benefiting from robust vSAN, NSX and EUC licensed bookings growth. Moreover, increasing proportion of Hybrid Cloud & SaaS revenues is positive.

Offshore Projects Aid Schlumberger (SLB), Drilling Slowdown Ails

The Zacks analyst expects Schlumberger to gain from new offshore projects in the shallow water basins outside North America. However, slowdown in U.S. drilling will hurt the firm's oilfield services.

Technology, Loans Aid ICICI Bank (IBN), Asset Quality a Woe

Per the Zacks analyst, ICICI Bank's efforts to digitize operations, and steady loan and deposit growth will support profitability.

Growing Topline Aids MarketAxess (MKTX), High Costs Hurt

Per the Zacks analyst, growing revenues driven by selective buyouts and strategic alliances has led to significant growth.

Domestic Oil Focus, Ongoing Investment Aid WPX Energy (WPX)

Per the Zacks analyst WPX Energy's consistent investments to develop high margin Delaware and Williston Basins oil assets will continue to boost its performance.

Dave & Buster's (PLAY) Rides on Store Openings Amid High Costs

Per the Zacks analyst, Dave & Buster's continued efforts to drive revenues through new store growth in both new and existing markets bodes well.

Ironwood's (IRWD) Linzess Holds Potential, IBS-C Space Crowded

The Zacks analyst thinks that Linzess holds blockbuster potential with several label expansion under review.

New Upgrades

Robust Used Car Market & Store Expansion Aid CarMax (KMX)

Per the Zacks analyst, improved store sales & digital moves are driving CarMax's comparable-store used vehicle unit sales. The rise in sales is getting complemented by aggressive store expansion.

Acquisitions, Rise in Loans Aid Raymond James' (RJF) Growth

Per the Zacks analyst, strategic acquisitions, strong balance sheet position and rising loan balances will support Raymond James' profitability in the quarters ahead.

Lamb Weston (LW) Sales to Gain from Price/Mix & Volumes

Per the Zacks analyst, Lamb Weston's top line is likely to keep gaining from pricing actions, favorable mix and solid volumes. focus on limited time offerings has been driving volumes for a long time.

New Downgrades

Republic Services (RSG) Grapples With Weak Landfill Pricing

The Zacks analyst believes that weak landfill pricing due to high cost of landfills and leachate can limit Republic Services' ability to increase prices, thereby weighing on its margins and earnings.

Wayfair (W) Hurt by Growing Expenses & Rising Competition

Per the Zacks analyst, Wayfair is suffering from increasing advertising and investment spending. Further, growing competition in e-commerce space from a dominant player like Amazon remains a headwind.

Weak Tow Pricing, Higher Input Costs Ail Celanese (CE)

Per the Zacks analyst, the company faces headwinds from lower acetate tow pricing and raw material cost inflation, which will weigh on its margins in 2019.

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VMware, Inc. (VMW) : Free Stock Analysis Report
Schlumberger Limited (SLB) : Free Stock Analysis Report
Novartis AG (NVS) : Free Stock Analysis Report
3M Company (MMM) : Free Stock Analysis Report
ICICI Bank Limited (IBN) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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