Top Analyst Reports for Amazon, Intel & Merck
Wednesday, September 26, 2018
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), Intel (INTC) and Merck (MRK). 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 >>>
Amazon’s shares have outperformed the broader market year to date by a wide margin. (the stock is up +68.9% vs. the +9.2% gain for the S&P 500 as a whole). The Zacks analyst thinks Amazon continues to ride on its robust performance in the retail space on the back of its vast e-commerce platform, fast delivery services, Prime program, increasing engagement of Prime customers and solid third-party selection.
Moreover, Amazon’s expanding distribution footprint bodes well for Prime. Further, Amazon Web Services (AWS) also continues to perform well, owing to its expanding enterprise customer base. Notably, AWS generates much higher margins than retail, positively impacting Amazon’s profitability. Additionally, the company’s advertising business is also gaining traction.
However, an anticipated increase in fulfillment cost prior to the holiday season can put margins under pressure. Moreover, intensifying competition in the cloud computing market from the likes of Microsoft Azure and Google cloud is a significant headwind.
(You can read the full research report on Amazon here >>>).
Shares of Buy-ranked Intel have underperformed the Zacks General Semiconductor industry over the past year, gaining +22.3% vs. +29.7%. The Zacks analyst thinks Intel is benefiting from robust performance of the Data Center Group, Internet-of-Things Group, Non-Volatile Memory Solutions and Programmable Solutions Group.
These segments form the crux of Intel’s data-centric business model. The company’s strategy of expanding TAM beyond CPU to adjacent product lines like silicon photonics, fabric, network ASICs, and 3D XPoint memory is bearing fruit. Further, expanding customer base in the PSG segment drove top-line growth. Moreover, stable PC market is also positive for the company.
Additionally, lower spending helped in expanding operating margins. Intel raised 2018 guidance based on these solid growth trends. However, delay in transition to 10-nm process is a concern. Intensifying competition remains a headwind.
(You can read the full research report on Intel here >>>).
Buy-ranked Merck’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry year to date, gaining +25.5% versus +6.7%. The Zacks analyst thinks Merck’s new products like Keytruda, Lynparza, and Bridion should continue to contribute meaningfully to the top line.
Keytruda sales are gaining strong momentum with approval for additional indications especially in the first-line lung cancer setting as it is the only anti-PD-1 approved in this setting. Animal Health unit is also strong and remains a core growth driver for Merck. Meanwhile, Merck will continue to focus on cost-cutting initiatives to drive the bottom line.
However, generic competition for several drugs and pricing pressure will continue to be overhangs on the top line. Rising competitive pressure on the diabetes franchise and on products like Isentress (HIV), Zepatier (HCV) and Zostavax (vaccine) will remain headwinds in 2018.
(You can read the full research report on Merck here >>>).
Other noteworthy reports we are featuring today include Micron (MU), Celgene (CELG) and S&P Global (SPGI).
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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) Rides on Prime & AWS Amid Rising Competition
Robust Adoption of FPGAs & Product Launches Aid Intel (INTC)
New Drugs to Drive Merck's (MRK) Sales as Competition Soars
Featured Reports
Revlimid Fuels Celgene (CELG) Amid Recent Pipeline Setbacks
Per the Zacks analyst, strong Revlimid sales should boost Celgene's top-line. The recent Juno acquisition is encouraging. However, pipeline setbacks remain a cause for concern.
Micron (MU) Benefits From Growing Demand for DRAM Solutions
Per the Zacks analyst, Micron is benefiting from elevated demand for DRAM products in datacenters, IoT and AI markets.
Juniper (JNPR) to Gain from Higher Demand for Data Traffic
Per the Zacks analyst, Juniper is likely to benefit from the increasing demand for data center virtualization, cloud computing, optical convergence and subsequent upgrade of carrier networks.
Loan Growth & Expansion Moves Support BOK Financial (BOKF)
Per the Zacks analyst, BOK Financial reflects organic growth with easing margin pressure and escalating loan balances.
Rising Freight Demand Benefits Landstar System (LSTR)
Amid high freight demand, the Zacks analyst likes the company's top-line growth owing to increase in number of loads hauled and a substantial rise in revenue per load across all modes.
Neogen's (NEOG) Genomic Arm Grows Strong on Global Expansion
The Zacks analyst is optimistic about rapid growth in Neogen's genomic business banking on new acquisitions in Australia and Brazil.
Rapid Business Expansion Aids Renesola (SOL), Currency Risk Hurts
Per the Zacks analyst, ReneSola is successfully expanding its business in international markets.
New Upgrades
Edwards (EW) Rides on Solid THV Sales and Global Prospects
Per the Zacks analyst, Edwards' strong THV sales in the domestic and global markets is a major positive. Also, the company firming its hold in the Asian markets, especially Japan buoys optimism.
Operational Excellence Plans Bode Well for Weyerhaeuser (WY)
Per the Zacks analyst, Weyerhaeuser's focus on operational excellence plans, like merchandising for value, harvest & transportation efficiencies and more, are encouraging.
Praxair (PX) Well Placed On New Onsite Project Wins
Per the Zacks analyst, Praxair will gain from new orders for three onsite projects and the CNOOC project. New onsite business opportunities especially in the U.S. Gulf Coast will also drive growth.
New Downgrades
Increasing Royalty Fee Hurts Sirius XM Holdings (SIRI).
Per the Zacks analyst, Sirius XM Holdings' bottom line is under pressure due to high royalty cost. Surging debt level is also a concern for the company.
Constitution Pipeline Hurdles, High Debt Ail Williams (WMB)
The Zacks analyst is concerned about the constant regulatory roadblocks which William Companies' Constitution Pipeline is suffering from. Further, high leverage of 70% limits the company's growth.
S&P Global (SPGI) Hit by Weak Issuance in U.S. and Asia
Per the Zacks analyst, weak issuance in the United States and Asia is weighing on S&P Global's top line. Initial issuance was so strong that it crowded out issuers??? capacity to tap re-pricing.
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S&P Global Inc. (SPGI) : Free Stock Analysis Report
Micron Technology, Inc. (MU) : Free Stock Analysis Report
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
Intel Corporation (INTC) : Free Stock Analysis Report
Celgene Corporation (CELG) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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