Wednesday, February 20, 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 Walmart (WMT), Amgen (AMGN) and Honda (HMC). 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 >>>
Walmart’s shares have outperformed the Zacks Supermarkets industry over the past six months (+6.3% vs. +5.7%), due to its focus on strengthening e-commerce and store operations. The Zacks analyst thinks these factors helped the company retain its sturdy comps trend in fourth-quarter fiscal 2019, wherein top and bottom lines improved year over year and the latter marked its fourth consecutive beat. Notably, U.S. comps rose for the 18th straight time.
Further, e-commerce sales surged on the back of strong Walmart.com and online grocery performances. E-commerce sales are expected to rise nearly 35% in fiscal 2020.
Walmart is also making efforts to improve its International unit by shifting focus to profitable countries. To this end, the company’s investment in Flipkart is however expected to dent the bottom line in fiscal 2020. Transportation costs and a compelling pricing strategy are threats to gross margin. Nonetheless, the Flipkart deal bodes well for the long term.
(You can read the full research report on Walmart here >>>).
Shares of Amgen have gained +2.4% in the past year versus the Zacks Biomedical and Genetics industry's decline of -16.3%. Amgen beat expectations for both earnings and sales in the fourth quarter. However, its 2019 guidance reflects a year-over-year decline.
The Zacks analyst thinks that while Amgen’s newer drugs — Prolia, Xgeva, Blincyto, Kyprolis — will drive sales, biosimilar and brand competition faced by its legacy products will create pressure on the top line in 2019. Meanwhile, uptake of key drug, Repatha has been slow due to payer restrictions and the recent price cut will hurt sales going forward.
Amgen is progressing with its pipeline and the approval of Aimovig was a huge boost. In the past five years, The company has launched nine products, including two in new therapeutic areas. Amgen boasts a strong biosimilars pipeline, which could be an important long-term growth driver for the company. Its restructuring plan is making it leaner and more cost efficient.
(You can read the full research report on Amgen here >>>).
Buy-ranked Honda’s shares have outperformed the Zacks Foreign Automotive industry over the past six months, losing -9.2% vs. -15.2%. In third quarter of fiscal 2019, Honda’s revenues improved year over year.
The Zacks analyst likes the company’s Vision 2030 plan which aims to boost coordination between research and development as well as procurement and manufacturing of its products that will aid the company to reduce developmental costs and focus more on electric vehicles.
Also, its revenues streams in motorcycle and financial segments and favorable model mix are adding to profits. The company’s collaboration with other companies to develop autonomous and electric vehicles will allow it offer new technologies and expand business.
(You can read the full research report on Honda here >>>).
Other noteworthy reports we are featuring today include TransCanada (TRP), Ameren (AEE) and TransUnion (TRU).
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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
E-commerce Sales to Fuel Walmart (WMT), Soft Margins a Woe
Amgen (AMGN) Counts on New Drugs Amid Rising Biosimilar Woes
Honda (HMC) to Gain From Vision 2030 Plan and Model Mix
Bruce Power Project Aids TransCanada (TRP) Amid Debt Woes
Per the Zacks analyst, the Bruce Power life extension project is expected to provide TransCanada with long-term growth. However, its debt load of C$36.5 billion is a concern.
TransUnion (TRU) Rides on Acquisitions, High Debt a Concern
The Zacks analyst likes TransUnion's acquisition strategy to expand its product portfolio and enter new markets.
Solid Cash Flow & Investment Strategy to Aid Ameren (AEE)
Per the Zacks analyst, solid cash flow from operating activities enables Ameren to invest significantly in growth projects and infrastructure upgrades.
Higher Nitrogen Demand, Prices to Aid CF Industries (CF)
While CF Industries faces volume pressure from plant turnarounds, higher global demand and prices for nitrogen fertilizers will drive its sales and margins in 2019, per the Zacks analyst.
Improving Premiums Aid Unum Group (UNM), High Expenses Ail
Per the Zacks analyst, Unum is poised to grow on higher premiums driven by high persistency, strong sales volume and solid benefits experience.
Booz Allen Hamilton (BAH) Rides on Growth Moves, Innovation
The Zacks analyst thinks the implementation of Vision 2020 is helping Booz Allen enhance technical expertise and perform strongly in the global commercial market.
Asset Growth Aids Invesco's Top Line (IVZ), High Costs a Woe
Per the Zacks analyst, rise in assets under management, driven by volatility in the equity market will aid Invesco's revenues.
Focus on Hospitality, New Galleries To Boost RH's (RH) Sales
Per the Zacks analyst, new initiatives across the gallery openings, the expansion in hospitality and the extension of the RH brand are expected to boost growth for RH.
Biologics Arm, New Launches Aid NuVasive (NUVA)
The Zacks analyst is optimistic about NuVasive's Biologics business that is registering promising growth of late, banking on new product line extensions and comprehensive leadership development.
Strong Traction in Engine Products Drives Donaldson (DCI)
Per the Zacks analyst, solid traction of Donaldson's Engine Products business, led by strength in Off-Road, On Road and Aftermarket business along with BOFA International buyout will drive its sales.
Soft Canadian Unit Continues to Trouble Kraft Heinz (KHC)
Per the Zacks analyst, Kraft Heinz grapples with lower sales in the Canadian unit, mainly due to product discontinuations. Notably, the unit's sales fell 5.6% year on year in the third quarter.
High Debt & Competition Continue to Hurt MGM Resorts (MGM)
The Zacks analyst is worried about MGM Resorts' heavy reliance on debt financing.
Higher Labor Costs Likely to Impact Pool Corp. (POOL) Margins
Per the Zacks analysts, higher labor and delivery costs, as well as investments in information technology systems and hardware are likely to hurt Pool Corp margins in the coming quarters.
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Walmart Inc. (WMT) : Free Stock Analysis Report
TransUnion (TRU) : Free Stock Analysis Report
TransCanada Corporation (TRP) : Free Stock Analysis Report
Honda Motor Co., Ltd. (HMC) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
Ameren Corporation (AEE) : Free Stock Analysis Report
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