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Top Analyst Reports for Merck, Cisco & Morgan Stanley

·6 min read

Wednesday, September 14, 2022
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 Merck & Co., Inc. (MRK), Cisco Systems, Inc. (CSCO) and Morgan Stanley (MS). 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 >>>

Merck shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+21.6% vs. +9.0%). Company products like Keytruda, Gardasil and Bridion have been driving sales. With continued label expansion into new indications & early-stage settings, Keytruda is expected to remain a key top-line driver.

Animal health and vaccine products are core growth drivers. Its new COVID oral antiviral pill, Lagevrio, is a key top-line driver in 2022. Merck also has a strong cancer pipeline, including Keytruda, which should drive long-term growth.

However, generic competition for several drugs and rising competitive pressure, mainly on the diabetes franchise, will continue to be overhangs on the top line. There are concerns about Merck’s ability to grow its non-oncology business ahead of Keytruda’s loss of exclusivity later in the decade.

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

Cisco’s shares have gained +15.3% over the past two years against the Zacks Computer - Networking industry’s gain of +14.6%. The company’s results benefited from strength in its product portfolio, customer segments and momentum in product order growth. It is benefiting from a healthy uptake of identity and access, advanced threat and unified threat management security solutions amid high growth in Internet traffic.

The buyout of Acacia is key catalyst. Cisco is expanding its portfolio with the launch of Silicon One-based 8000 routers, Nexus Cloud, Calisti and Panoptica. Cisco also announced AppDynamics Cloud, a next-gen version of its observability platform for cloud native applications.

Cisco’s investments across its security business, focusing on cloud-based offerings, is expected to drive growth over the long haul. Cisco provided a strong outlook for first-quarter and fiscal 2023.

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

Morgan Stanley’s shares have declined -9.1% year-to-date against the Zacks Financial - Investment Bank industry’s decline of -11.9%. The company’s ambiguity about the performance of the capital markets remains a major concern and is expected to keep hampering investment banking (IB) and trading revenues. Elevated expenses due to investments and inflationary pressure will likely hurt profits to some extent in the near term.

However, Morgan Stanley is continuously undertaking measures, including the acquisitions of Eaton Vance and E*Trade Financial, to become less dependent on capital market-driven revenue sources.

These initiatives are bearing fruit. Increased focus on corporate lending will likely keep supporting financials in the quarters ahead. Further, higher interest rates will support net interest income.

(You can read the full research report on Morgan Stanley here >>>)

Other noteworthy reports we are featuring today include Honeywell International Inc. (HON), CME Group Inc. (CME), and Canadian Natural Resources Ltd. (CNQ).

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

Keytruda to Remain Merck's (MRK) Key op Line Driver in 2022

Cisco (CSCO) Benefits From Strong Security Products Adoption

Buyouts Support Morgan Stanley (MS), Capital Markets A Woe

Featured Reports

Aerospace Segment Backs Honeywell (HON) Amid Cost Headwinds
The Zacks analyst is encouraged by the strength in Honeywell's Aerospace segment owing to recovery in commercial flight hours. However, raw material cost-inflation poses a threat to the bottom line.

Improving Clearing and Transaction Fees Aid CME Group (CME)
Per the Zacks analyst, CME is set to grow on higher clearing and transaction fees as market position, diverse derivative product lines and global reach drive volumes. However, escalating expense ails.

Diverse Production Mix to Aid Canadian Natural (CNQ)
The Zacks analyst sees Canadian Natural's diverse production mix facilitating long-term value and reducing risk profile but is worried about the company's debt maturities each year out till 2027.

Lam Research (LRCX) Benefits From Strengthening NAND Demand
Per the Zacks analyst, increasing NAND requirement in accelerating 5G migration, video, and new game consoles is driving the top-line growth of Lam Research.

Chipotle (CMG) Banks on Digital Sales, Wage Inflation High
Per the Zacks analyst, digitalization will continue to play a crucial role in sustaining growth for restaurant operators. However, elevated wage inflation is a concern.

Investments Aid Ameren (AEE), High Emission Expenses Woe
Per the Zacks analyst, systematic investment in infrastructure project boosts Ameren's growth. Yet the stock bears high expenditure to comply with air emission regulations that may hurt its results.

Acquisitions and Strong Pricing Support ManpowerGroup (MAN)
Per the Zacks analyst, the acquisition of ettain group accelerates ManpowerGroup's strategy to fuel higher growth for its business mix. Also, strong pricing and cost control are positives.

New Upgrades

Schlumberger (SLB) to Gain on Rising Oilfield Service Demand
The Zacks analyst believes that Schlumberger (SLB) is well-positioned to capitalize on the rising demand for its oilfield services, as strong oil prices have heightened drilling activities.

Sprouts Farmers' (SFM) Omnichannel Offering to Propel Sales
Per the Zacks analyst, Sprouts Farmers' assortment of better-for-you products focus on providing hassle-free shopping through omnichannel offering and a network of fresh distribution centers bode well

Rising Premiums, Acquisitions Benefit ProAssurance (PRA)
Per the Zacks analyst, the company's gross premiums continue rise on higher new business written and strong retention rates. Buyouts and integrations undertaken bode well for the long haul.

New Downgrades

Macro Weakness and Supply Troubles Ail Western Digital (WDC)
Per the Zacks analyst, Western Digital's performance is being affected by lower HDD shipments. Weak macroeconomic conditions, lingering supply-chain woes and component shortages remain concerns

lIlumina (ILMN) Irked by Low Sales Amid Supply Chain Issues
The Zacks analyst is discouraged by Illumina's declining revenues across the EMEA and Greater China regions. Persistent supply chain pressures also continue to challenge business operations.

Urban Outfitters (URBN) Witnesses Higher SG&A Expenses Now
Per Zacks analyst, Urban Outfitters has been witnessing higher SG&A costs. Increased store payroll costs as well as higher marketing and creative spend to support digital growth increase SG&A costs.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Morgan Stanley (MS) : Free Stock Analysis Report
CME Group Inc. (CME) : Free Stock Analysis Report
Honeywell International Inc. (HON) : Free Stock Analysis Report
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Canadian Natural Resources Limited (CNQ) : Free Stock Analysis Report
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