Wednesday, January 16, 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 Procter & Gamble (PG), NVIDIA (NVDA) and Bristol-Myers (BMY). 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 >>>
Procter & Gamble’s shares outperformed the Zacks Soap and Cleaning Materials industry in the past three months, gaining +12.4% vs +5.8%. The Zacks analyst thinks that this can be attributed to the company’s robust earnings history, having outpaced estimates for 14 straight quarters when it reported first-quarter fiscal 2019. Moreover, earnings grew year over year.
Also, sales beat estimates, though it remained flat due to adverse currency fluctuations – which acted as a major deterrent in the first quarter and is likely to remain a concern in the second quarter. The company has been witnessing strained margins for last few quarters due to higher commodity and shipping costs, adverse currency, increased business investments and aggressive pricing from private-label products. Soft baby care business is also a concern.
Nevertheless, the company is focused on improving productivity and cost savings to boost margins. Its focus on product improvement, packaging and marketing initiatives is encouraging.
(You can read the full research report on Procter & Gamble here >>>).
Shares of NVIDIA have underperformed the Zacks General Semiconductor industry over the past year (down -33.3% vs. -11.7%). The Zacks analyst thinks NVIDIA is gaining from its sustained efforts toward attaining a robust position in several emerging industries.
Growth opportunities in ray-traced gaming, rendering, high-performance computing, artificial intelligence (AI) and self-driving cars are expected to be the company’s consistent tailwinds. Rapid adoption of GPUs in the automotive and datacenter markets is a key growth driver.
However, the company is experiencing a rough time due to a string of weaknesses plaguing the semiconductor market recently. The end of the cryptocurrency mining boom weakened demand for its GPUs. The company is hurt by weakness in the Gaming segment, which is affected by an excess inventory of midrange Pascal products.
(You can read the full research report on NVIDIA here >>>).
Bristol-Myers’ shares have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year, losing -19.6% vs. -1.2%. The Zacks analyst thinks Bristol-Myers' blockbuster immuno-oncology drug Opdivo’s performance is being boosted by the uptake in new indications - first line renal cell carcinoma and adjuvant melanoma.
The company is looking to expand Opdivo’s label further which should boost performance. Eliquis is expected to drive growth, owing to increases in market share in the novel oral anticoagulant (NOAC) market. The label expansion of other drugs like Sprycel and Empliciti also bode well for the company and should boost performance. The recently announced acquisition of Celgene should further strengthen the company’s oncology franchise.
However, the FDA extension of the PDUFA date for the sBLA seeking approval of Opdivo+Yervoy as a treatment for first-line non-small cell lung cancer was disappointing given the market potential. Competition is stiff as well.
(You can read the full research report on Bristol-Myers here >>>).
Other noteworthy reports we are featuring today include ADP (ADP), Deere (DE) and Ecolab (ECL).
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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
P&G's (PG) Productivity & Cost Savings Plan to Aid Margins
NVIDIA (NVDA) Rides on Solid Automotive & Datacenter Demand
Opdivo Fuels Bristol-Myers' Growth (BMY) Amid Stiff Competition
ADP Rides on Strategic Buyouts Amid Technological Challenges
The Zacks analyst believes that acquisitions help ADP strengthen its position in the HCM market.
Deere (DE) to Gain From Acquisitions Amid Rising Costs
Per the Zacks analyst, Deere is poised to gain from acquisitions including Wirtgen and introduction of advanced technologies.
Declining Fee income & Legal Issues Persist for Citigroup (C)
Per the Zacks analyst, though Citigroup is working hard on restructuring activities to focus on core operations, declining fee income and litigation burden related to past misconduct persists.
Acquisitions, Strong Medicaid Business Aids Centene (CNC)
Per the Zacks analyst, the acquisitions of Health Net, Community Medical Holdings, MHM Services and Fidelis Care have widened the company's Medicaid business aiding revenue growth.
Pharmaceutical Offerings Aid Cardinal (CAH), Competition Ails
The Zacks analyst is apprehensive about cutthroat competition in MedTech space.
Fastenal (FAST) Strong on Vending Machines, Margins Weak
Focus to boost Onsite locations, vending machines count and ecommerce business will drive growth, per the Zacks analyst.
Customer Wins to Aid Teradata (TDC) Amid Stiff Competition
Per the Zacks analyst, new customer wins are expected to drive top-line growth for Teradata, amid increasing competition.
Rising Demand, Cost Reduction Aid Aerojet Rocketdyne (AJRD)
Per the Zacks analyst, growing demand in propulsion market boosts Aerojet Rocketdyne's growth. Strategic cost reduction initiatives aimed at serving customers more efficiently is another positive.
Booz Allen Hamilton (BAH) Rides on Growth Moves, Innovation
The Zacks analyst believes that the implementation of Vision 2020 is helping Booz Allen Hamilton witness strong performance in the global commercial market.
Dolby (DLB) Rides on Solid Licensing Unit, Liquidity Strength
Per the Zacks analyst, increasing market traction of digital media adapters, sound bars and cinema technology should boost Dolby's top line, while healthy liquidity position ensures stability.
Sluggishness in Energy Segment Plagues Ecolab (ECL)
The Zacks analyst apprehends that unfavorable pricing, margin woes and competition are the drivers behind the dull outlook.
Rate Relief Dependency Hurts American Electric Power (AEP)
Per the Zacks analyst, dependence on regulatory commissions for rate relief at regular intervals and heavy investments made to meet these environmental regulations could be a growth deterrent.
Destiny Loss & Stiff Competition to Hurt Activision (ATVI)
Per the Zacks analyst, Activision's top-line growth is expected to suffer from ceding publishing rights of the Destiny franchise amid intensifying competition.
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