Monday, June 10, 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 Oracle (ORCL), Eli Lilly (LLY) and Mondelez (MDLZ). 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 >>>
Oracle’s shares have underperformed the Zacks Computer Software industry in the past six months, gaining +14.7% vs. +21.4%. Oracle is one of the largest enterprise-grade database, middleware and application software providers. The Zacks analyst thinks the company is benefiting from strong adoption of its cloud-based solutions, comprising Fusion ERP and Fusion HCM, among others.
Partnerships with the likes of Accenture are helping the company rapidly expand its cloud-base clientele. Also, anticipated strong demand for the next-generation autonomous database supported by machine learning will boost its competitive position against Amazon Web Services (AWS).
Nevertheless, stiff competition in the cloud market from dominant players is anticipated to limit margin expansion. Further, lower hardware volumes are anticipated to hurt top-line growth consequently keeping margins under pressure. Additionally, integration risks from buyouts remain a concern.
(You can read the full research report on Oracle here >>>).
Shares of Eli Lilly have gained +2.2% year to date, outperforming the Zacks Large Cap Pharmaceuticals industry, which has gained +1.7% over the same period. The Zacks analyst thinks Lilly’s revenue growth in 2019 will likely be driven by higher demand for its newer drugs including Trulicity, Jardiance, Taltz, Verzenio as well as new migraine drug, Emgality as some older drugs like Cialis face generic competition.
Lilly has made significant pipeline progress in the past year with several positive late-stage data readouts, multiple approvals and regulatory submissions. Lilly also added promising new pipeline assets through business development deals.
However, competitive pressure on Lilly’s drugs is expected to rise in 2019. Generic competition for several drugs including Cialis, rising pricing pressure, currency headwinds and the impact of the failed Lartruvo study are expected to put pressure on the top line.
(You can read the full research report on Eli Lilly here >>>).
Mondelez’s shares have gained +14.7% in the past three months, outperforming the +6.1% increase of the Zacks Food Preparation industry. The Zacks analyst thinks the company is steadily gaining from strategic pricing endeavors. In fact, during the first quarter of 2019, balanced pricing and volume/mix helped organic revenues to rise nearly 3.7%. Also, pricing led to adjusted gross margin improvement.
Going forward, management plans to continue striking a balance between volumes and pricing. Additionally, it is progressing well with saving initiatives. Mondelez also focuses on brand building through innovation. It is bolstering presence in emerging markets.
However, the company grapples with adverse currency movements, which dented top-line performance during the first quarter. Management expects currency fluctuation to be a drag in 2019. Higher raw material costs and rising SG&A expenses are other concerns.
(You can read the full research report on Mondelez here >>>).
Other noteworthy reports we are featuring today include Boeing (BA), Walgreens (WBA) and Southwest Airlines (LUV).
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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
Oracle (ORCL) Gains from Cloud Suite Adoption & Partnerships
New Drugs to Drive Lilly's (LLY) Sales Amid Generic Pressure
Productivity Savings to Aid Mondelez (MDLZ) Margins
Dividends & Buybacks Buoy Southwest (LUV) Amid Cost Woes
The Zacks analyst appreciates the company's efforts to reward shareholders. High operating expenses are, however, limiting bottom-line growth.
Seagate (STX) Banks on Exabyte Demand & Product Rollouts
Per the Zacks analyst, Seagate is benefiting from growing Exabyte demand across major end-markets. Also, sustained focus on launching high-capacity storage products is a positive.
Vail Resorts (MTN) Gains From Acquisitions, High Costs Hurt
The Zacks analyst thinks that Vail Resorts' acquisitions such as Triple Peaks and Stevens Pass Resort is helping the company improve its operating results despite higher expenses.
Guidewire (GWRE) Rides on Acquisitions & Cloud Partnerships
Per the Zacks analyst, Guidewire's elaborate partnership programs and strategic collaborations are major growth drivers.
Expanding Customer Base Aids Nutanix (NTNX) Amid High Costs
Per the Zacks analyst, Nutanix is benefiting from steady deal wins and the adoption of its products, particularly the AHV hypervisors.
Ciena (CIEN) Buoyed by Market Share Expansion Amid High OpEx
Per the Zacks analyst, Ciena should benefit from market share gains led by technology leadership and a diversified customer base in high-growth markets.
Aduo's (ADRO) Collaboration Deals Fund Pipeline Innovation
Per the Zacks analyst, Aduro's collaboration and licensing deals with large pharma entities help fund pipeline development.
Retail USA Growth, Verily Deal to Aid Walgreens (WBA)
The Zacks analyst is bullish about Walgreens' initiative to improve prescription growth in Retail Pharmacy USA. Its alliance with Alphabet's Verily on multiple projects aims to expand customer base.
Margin Growth, Buyouts to Aid Parker-Hannifin (PH)
Per the Zacks analyst, Parker-Hannifin's revamped "Win Strategy" will continue to boost margins, going ahead. Also, CLARCOR and Helac buyouts are expected to fortify filtration and hydraulics units.
Strategic Plans to Aid Aerojet (AJRD) Amid High Leverage
Per the Zacks analyst, Aerojet Rocketdyne's strategic initiatives to reduce costs should boost its growth. Yet, the stock is highly leveraged and thus bears higher chance of insolvency.
Lower 737 Deliveries, Jet Deal Loss Hurt Boeing (BA)
Per the Zacks analyst, Boeing's commercial business suffered a major setback lately due to lower 737 deliveries. Moreover, collapse of India's Jet Airways dealt another blow to this aircraft giant.
Sluggish Flagship Brand Continues to Hurt Gap's (GPS) Results
Per the Zacks analyst, Gap has been witnessing persistent softness in its flagship brand due to operational and assortment issues. Apparently, comps at the brand fell 10% in first-quarter fiscal 2019.
VITAS Seasonality Continues to Impede Chemed's (CHE) Growth
The Zacks analyst is concerned about the seasonal nature of VITAS business which may continue to hamper Chemed's top line. Reimbursement issues restrict growth.
Walgreens Boots Alliance, Inc. (WBA) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report
Southwest Airlines Co. (LUV) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
The Boeing Company (BA) : Free Stock Analysis Report
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