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Top Analyst Reports for Merck, CVS Health & American Tower

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·6 min read
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Wednesday, April 6, 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), CVS Health Corporation (CVS), and American Tower Corporation (AMT). 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 >>>

Shares of Merck have outperformed the Zacks Large Cap Pharmaceuticals industry over the year-to-date period (+10.2% vs. +5.4%) on the back of strong sales from drugs like Keytruda, Lynparza, and Bridion. Animal health and vaccine products remain core growth drivers. Its new oral antiviral pill for COVID-19, molnupiravir, will be a key top-line driver in 2022. Merck boasts a strong cancer pipeline, including Keytruda, which should help drive long-term growth.

The separation into two companies should enable Merck to achieve higher profits than the combined company. 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 loss of exclusivity later in the decade.

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

Shares of CVS Health have outperformed the Zacks Retail - Pharmacies and Drug Stores industry over the past year (+36.7% vs. +16.1%) as the company continues to come out with stellar results. In the last reported quarter, the company administered more than 8 million COVID-19 tests and more than 20 million COVID-19 vaccines nationwide. It took several steps to support the acceleration of its omnichannel health strategy, including creating new store formats and optimizing its retail footprint to align with evolving customer needs.

The Zacks analyst believes that the company is strengthening the consumer experience by expanding digital services and platforms to health services and in-person channels for more than 40 million unique digital customers. However, the rise in operating costs is building pressure on the bottom line.

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

American Tower shares have gained +9.5% over the past year as against the Zacks REIT and Equity Trust - Other industry’s gain of +18.3%. The Zacks analyst believes that the extensive and geographically diversified communication real estate portfolio is well-poised to benefit from the increasing capital spending by wireless carriers due to 5G deployments and the future deployment of an additional spectrum. The company is strengthening its portfolio through acquisitions. In December, American Tower announced completing the buyout of CoreSite.

In March, American Tower also announced an increase in its quarterly dividend, which augurs well for investors. However, the stiff competition from other tower companies is likely to increase pricing pressure. Moreover, tenant concentration is concerning as consolidations or a reduction in network spending adversely impact the company’s top line.

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

Other noteworthy reports we are featuring today include QUALCOMM Incorporated (QCOM), PetroChina Company Limited (PTR), and Analog Devices, Inc. (ADI).

Sheraz Mian
Director of Research

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

Key Drugs & Animal Health Unit Drive Merck's (MRK) Sales

Robust Pharmacy Sales Aid CVS Health (CVS), Rising Costs Ail

American Tower (AMT) to Gain From 4G LTE & 5G Investments

Featured Reports

PetroChina (PTR) to Benefit from Natural Gas Business
The Zacks analyst believes PetroChina's natural gas business offers lucrative growth prospects in the coming years but is worried about the limited progress in expanding its international exposure.

Solid Demand, Operating Leverage to Aid Qualcomm (QCOM)
Per the Zacks analyst, Qualcomm is likely to benefit from the increasing demand for its solutions in the cloud economy while it continues to lead the 5G transition and diversify its business.

BMS Solutions & Solid Radio Systems Aid Analog Devices (ADI)
Per the Zacks analyst, Analog Devices is riding on growing momentum of Battery Management System solutions in electric vehicles and solid adoption of advanced radio systems in 5G infrastructure.

Pioneer Natural (PXD) Banks on Oil-Rich Permian Basin Assets
The Zacks analyst believes that Pioneer Natural's one million-plus high-quality acreages in the Permian Basin will drive long-term oil production growth. Yet, rising exploration costs are concerning.

Allstate's (ALL) Property-Liability Line Aids Amid Cat Loss
Per the Zacks analyst, Allstate's sturdy property-liability business driven by pricing discipline boosts its growth. Yet, exposure to catastrophic events continues to dent underwriting profitability.

Solid Revenue Growth Aids J.B. Hunt (JBHT) Amid High Costs
Per the Zacks analyst, higher revenues generated from solid performance in the Dedicated Contract Services segment are a positive for J.B. Hunt. However, escalating expenses are a concern.

DICK'S Sporting's (DKS) Top Line Gains on Strong Demand
Per the Zacks analyst, DICK'S Sporting is gaining on solid demand and better product assortment, which is driving sales. In fourth quarter, sales grew 7.3% year over year and 28.5% on a two-year basis

New Upgrades

Builders FirstSource (BLDR) Benefits From Strategic Buyouts
Per the Zacks analyst, Builders FirstSource is benefiting from strategic acquisitions, cost synergies and robust demand arising from solid housing and repair & remodeling activities.

Semtech (SMTC) Rides on Growing Adoption of LoRa Solutions
Per the Zacks analyst, Semtech is benefiting from increasing demand for its LoRa devices and LoRaWAN standard owing to their various use cases in different industries.

Leer Mine, Long-term contracts Aid Arch Resources (ARCH)
Per the Zacks analyst Arch Resources will gain from its long-term contracts, while low-cost met coal production from Leer South longwall will ensure supply of high grade coking coal to global markets.

New Downgrades

Chip Crunch and Cost Woes to Crimp Ford's (F) Profits
The Zacks analyst is worried about the aggravating chip shortage that is prompting Ford to temporarily halt operations in factories lately. Also, high commodity & operating costs are denting margins.

Rising Operating Expenses Hurt Invesco's (IVZ) Profitability
Per the Zacks analyst, elevated costs due to Invesco's inorganic growth efforts and higher compensation costs will hurt profits. The presence of high levels of goodwill on the balance sheet is a woe.

Dismal Traffic & High Costs Hurt Yum China's (YUMC) Prospects
Per the Zacks analyst, Yum China has been witnessing elevated costs on account of labor inflation and packaging upgrades. Also, decline in traffic from pre-pandemic levels is a concern.

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
Analog Devices, Inc. (ADI) : Free Stock Analysis Report
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
American Tower Corporation (AMT) : Free Stock Analysis Report
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
PetroChina Company Limited (PTR) : Free Stock Analysis Report
CVS Health Corporation (CVS) : Free Stock Analysis Report
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