Wednesday, January 23, 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 Amazon (AMZN), Verizon (VZ) and AbbVie (ABBV). 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 >>>
Buy-ranked Amazon’s shares have outperformed the broader market in the past year by a wide margin (the stock is up +20.3% vs. the -7.1% decline for the S&P 500 as a whole). The Zacks analyst thinks Amazon’s strengthening retail position, riding on its growing global footprint and distribution strength remains its key growth driver.
Moreover, robust Prime and its benefits are aiding its retail business. Also, rapid expansion of Prime enabled grocery services and growing physical presence are tailwinds. Further, increasing AWS regions and its growing adoption will continue to aid Amazon’s cloud momentum. Also, rising number of Alexa compatible devices are a major positive. Amazon's strong holiday initiatives have boosted its holiday performance.
Estimates have been going up ahead of the company’s Q4 earnings release. The company has positive record of earnings surprises in recent quarters. However, its sales outlook for holiday season is weak due to changes in Indian holiday timing. Also, rising cloud battle and heavy investment in fulfillment centers are headwinds.
(You can read the full research report on Amazon here >>>).
Shares of Buy-ranked Verizon have gained +5.1% in the past year, outperforming the Zacks Wireless National industry’s decline of -4.4% during the same period. The Zacks analyst thinks Verizon remains poised to benefit from the upcoming 5G boom, driven by healthy traction in the wireless business.
The company is further seeking a first mover advantage in the 5G race as it plans to launch commercial 5G smartphones in the market in the first half of 2019 in collaboration with Samsung. Focus on online content delivery, mobile video and online advertising should also drive future growth.
In the enterprise and the wholesale business, Verizon is changing its revenue mix toward newer growth services like cloud, security and professional services. Management is bullish on the industry's ability to grow revenues from smartphones, tablets and cloud computing and has reiterated its earlier guidance. However, Verizon continues to struggle in a competitive and saturated U.S. wireless market, where spectrum crunch has become a major issue, hurting its profitability.
(You can read the full research report on Verizon here >>>).
AbbVie’s shares have gained +11.6% in the past three months, outperforming the Zacks Large-Cap Pharmaceuticals industry's increase of +2%. The Zacks analyst thinks AbbVie’s key drug, Humira has been performing well based on strong demand trends despite new competition. Moreover, Imbruvica has multibillion dollar potential. Mavyret’s launch has also been stronger than expected. AbbVie has also been successful in expanding approvals for its cancer drugs, Imbruvica and Venclexta.
AbbVie has a strong late-stage pipeline comprising several products with multibillion-dollar potential expected to be launched in the near term. AbbVie expects to launch more than 20 new products or line extensions of marketed drugs before Humira biosimilar competition begins in the United States in 2023. However, direct biosimilar competition to Humira in Europe from October can erode revenues in 2019. Nonetheless, estimates have gone up ahead of Q4 earnings. AbbVie has a positive record of earnings surprises in the recent quarters.
(You can read the full research report on AbbVie here >>>).
Other noteworthy reports we are featuring today include Celgene (CELG), Lowe’s (LOW) and Chubb (CB).
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>
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
Amazon (AMZN) Banks on Growing AWS Adoption & Robust Prime
Verizon (VZ) Rides on Healthy Traction in Wireless Business
AbbVie's (ABBV) Humira Driving Sales Amid Rising Competition
Revlimid's Label Expansion, Other Drugs Fuel Celgene (CELG)
Per the Zacks analyst, lead drug Revlimid, should maintain momentum for Celgene. The label expansion of other drugs should boost growth. The recently announced merger with Bristol-Myers is positive.
Home Improvements Growth, Digital Efforts Aid Lowe's (LOW)
Per the Zacks analyst, robust growth in home improvements business along with strong digital presence are likely to drive Lowe's top line further in the near future.
Higher Premiums Aid Chubb Limited (CB), Rising Costs Ail
Per the Zacks analyst, improving premiums will continue to boost revenues for Chubb, thereby driving overall performance. However, rising expenses will remain a concern.
Investments Aid Public Service (PEG), Price Volatility Hurts
Per the Zacks analyst, regular investments in infrastructure projects will boost future performance.
Strong Backlog Aids Ball Corporation (BLL), Freight Costs Ail
Per the Zacks analyst, Ball Corporation will likely gain from its strong backlog, new products and cost cutting actions despite higher freight costs.
MGM Resorts (MGM) Rides on Non-Gaming Revenues Amid High Debt
The Zacks analyst is encouraged by MGM Resorts' revenue growth, largely derived from non-gaming sources.
LabCorp (LH) Rides on Covance Arm Amid Reimbursement Woes
The Zacks analyst likes LabCorp's efforts to strengthen Covance's position in clinical development and increase revenue growth.
Cargo Revenues, Cost Cuts Buoy LATAM Airlines (LTM)
The Zacks analyst appreciates the growth in cargo and passenger revenues at LATAM Airlines. The company's efforts to check costs are also commendable.
Dividends, Buybacks & Intermodal Unit Aid J.B. Hunt (JBHT)
The Zacks analyst is impressed by the company's efforts to reward shareholders. Robust intermodal revenues also raise optimism in the stock.
TOP Efficiency Initiatives Support Citizens Financial (CFG)
Per the Zacks analyst, Citizens Financial's "Tapping Our Potential" (TOP) initiatives are expected to boost revenues and efficiency. It expects to deliver a pre-tax benefit of $90-110 million in 2019.
PC Sales Dip & Pricing Pressure Hurt Western Digital (WDC)
Per the Zacks analyst, a declining trend in PC shipments, sluggishness in client computer hard drives demand, weakness in storage flash market pricing and stiff competition are key negatives.
Low Investment Income, High Costs Ail Marsh & McLennan (MMC)
Per the Zacks analyst, declining net investment income continues to restrict margins. Escalating operating expenses due to high compensation and benefits also remain a concern.
Viacom (VIAB) Hurt By Slowing Media Advertising Revenues
Per the Zacks analyst, sluggish media advertising and domestic affiliate revenues are major headwinds for Viacom amid intensifying competition.
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Verizon Communications Inc. (VZ) : Free Stock Analysis Report
Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report
Celgene Corporation (CELG) : Free Stock Analysis Report
Chubb Limited (CB) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
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