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Top Research Reports for Alphabet, Johnson & Johnson & Union Pacific

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Sheraz Mian
·7 min read
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Tuesday, November 3, 2020

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 Alphabet (GOOGL), Johnson & Johnson (JNJ) and Union Pacific (UNP). 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 >>>

Alphabet shares have modestly outperformed the Zacks Internet Services industry in the year to date period (+23.7% vs. +22.2%), with most of the gains coming after the search giant's impressive Q3 results. The Zacks analyst believes that Google’s dominant search market share is a positive. Its focus on innovation, strategic acquisitions and Android OS should continue to generate strong cash flow.

Alphabet reported strong third-quarter earnings. The search, cloud and YouTube businesses remained strong in the quarter. The company’s strengthening cloud unit aided substantial revenue growth. Moreover, expanding data centers will continue to bolster its presence in the cloud space. Further, major updates in the search segment are enhancing the search results, which is a major positive.

Moreover, Google’s robust mobile search is gaining solid momentum. Additionally, strong focus on innovation of AI techniques and the home automation space should aid business growth in the long term. However, the company’s growing litigation issues and increasing expenses might hurt profitability.

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

Shares of Johnson & Johnson have gained +7.4% over the past year against the Zacks Large Cap Pharmaceuticals industry’s rise of +0.4%. The Zacks analyst believes that the Pharma unit is performing at above-market levels, supported by successful label expansion of blockbuster drugs, Imbruvica, Darzalex and Stelara. J&J is also making rapid progress with its pipeline and line extensions.

J&J beat estimates for sales and earnings in Q3. It raised its 2020 outlook due to faster-than-expected recovery in the Medical Devices unit with trends expected to improve further in Q4 and 2021.

Several pivotal data readouts are expected in the near-term. However, headwinds like generic competition and pricing pressure continue. J&J faces numerous lawsuits, which allege personal injuries to patients caused by the use of its products. These lawsuits have resulted in uncertainties.

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

Union Pacific shares have gained +19.6% over the past six months against the Zacks Rail industry’s rise of +25.1%. The Zacks analyst is pleased by the company's efforts toward promoting safety and enhancing productivity.

Union Pacific is suffering a dismal freight revenue scenario (down 13% in the first nine months of 2020). Freight revenues are being hurt, mainly by coronavirus-induced depressed volumes (down 10%). Weakness in the Bulk, Premium and Industrial units weighed on the overall volume picture. Deterioration in the debt-to-EBITDA ratio is an added woe. However, efforts to control costs, courtesy of the precision scheduled railroading model, are a positive, particularly, in the wake of revenue concerns.

Mainly owing to cost-cutting efforts, the operating ratio is predicted to improve in 2020. The company's ability to generate free cash flow (up 5.8% in the first nine months of 2020) is also a boon. An uptick in the company's parcel business on buoyant e-commerce demand is an added positive. Measures to reward its shareholders are also encouraging.

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

Other noteworthy reports we are featuring today include Eli Lilly (LLY), Charter Communications (CHTR) and Anheuser-Busch InBev (BUD).

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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

Alphabet (GOOGL) Rides on Diversification; Risks Remain

J&J's (JNJ) Pharma Segment Resilient Amid Generic Headwinds

Cost Cuts Aid Union Pacific (UNP), Low Freight Revenues Ail

Featured Reports

Trulicity, Taltz to Drive Lilly's (LLY) Sales Amid Pricing Woes

The Zacks analyst believes that Lilly's sales will be driven by higher demand for key drugs like Trulicity, Taltz, and others amid rising pricing in the United States mainly on Trulicity.

Mobile & Internet Subscriber Gain Benefits Charter (CHTR)

Per the Zacks analyst, higher subscriber strength in residential and commercial internet services along with broadening Spectrum Mobile user base is driving Charter's top line.

Gradual Recovery in Volume Trends Aid AB InBev (BUD) in Q3

Per the Zacks analyst, the gradual reopening of the on-premise channels across many countries led to improved volume trends for AB InBev.

Restructuring to Aid HSBC Holdings (HSBC) Amid Low Rates

Per the Zacks analyst, HSBC Holdings' efforts to improve operating efficiency through business restructuring will aid profits.

Growth Projects, Goldcorp Merger to Aid Newmont (NEM)

Per the Zacks analyst, Newmont is likely to benefit from progress in its key growth projects, including the Tanami expansion.

Strategic Initiatives Aid Aon (AON), Forex Volatility Hurts

Per the Zacks analyst, a number of acquisitions and tie-ups have helped Aon enhance its capabilities, which in turn, improved its bottom-line.

Marriott (MAR) Banks on Expansion Initiatives, RevPAR Dismal

Per the Zacks analyst, Marriott continues to focus on acquisitions in order to expand its footprint globally. However, dismal revenue per available room and occupancy rate remain a concern.

New Upgrades

Acquisitions & Cost Saving Actions Aid Avery Dennison (AVY)

Per the Zacks analyst, Avery Dennison will gain on cost-cutting efforts, acquisitions, and the ongoing strong demand witnessed by the Label and Packaging Materials segment amid the pandemic.

High Pandemic-led Funerals Drive Service Corporation (SCI)

Per the Zacks analyst, Service Corporation has been gaining on increased funerals due to high deaths amid the pandemic. This was witnessed in third quarter, where Funeral and Cemetery revenues grew.

High Loan Balance, Business Restructuring Aid Bank OZK (OZK)

Per the Zacks analyst, business restructuring initiatives, solid loans and deposit balances, and a strong balance sheet position will likely continue supporting Bank OZK's financials.

New Downgrades

Assurant (AIZ) Witnesses Cost Woes and Declining Premiums

Per the Zacks analyst, high cost due to higher administrative expenses weighs on margin expansion. Also, lower premiums from lender-placed insurance within Global Housing affect revenue growth.

Ciena (CIEN) Hurt by Pandemic-Led Orders Slowdown & Rivalry

Per the Zacks analyst, Ciena's revenues for a few quarters are expected to be hurt by orders slowdown resulting from the COVID-19 pandemic. Intense competition from small vendors is another concern.

Sanderson Farms (SAFM) Troubled by Soft Foodservice Demand

Per the Zacks analyst, Sanderson Farms is troubled by pandemic-led hurdles like low foodservice demand due to the closure of various away from home channels.

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
Union Pacific Corporation (UNP) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
Johnson Johnson (JNJ) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Charter Communications, Inc. (CHTR) : Free Stock Analysis Report
AnheuserBusch InBev SANV (BUD) : Free Stock Analysis Report
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