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Top Research Reports for IBM, McDonald's & Gilead

Mark Vickery
Top Research Reports for IBM, McDonald's & Gilead

Thursday, April 19, 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 IBM (IBM), McDonald's (MCD) and Gilead (GILD). 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 >>>

IBM’s shares have underperformed the broader market on a year-to-date basis, losing -3% vs. the S&P 500’s +1.2% gain. IBM’s first-quarter 2018 results were unimpressive. Although revenues and earnings per share increased from the year-ago quarter, the growth rates reflected sluggishness. This can primarily be attributed to the company’s ongoing heavily time-consuming business model transition to cloud.

Additionally, intensifying competition is a major concern. Nevertheless, improving position in the cloud, security and analytics bodes well. Moreover, accretive acquisitions have expanded IBM’s product portfolio into higher-growth segments, such as Cloud computing and Big Data.

Further, expanding footprint in the rapidly growing blockchain market is positive. However, the Zacks analyst thinks these emerging fields as well as the strategic imperatives will take some more time to report meaningful growth and offset weakness in the traditional business.

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

Shares of McDonald's have gained +21.4% over the past year, outperforming the Zacks Restaurants industry which has gained +9.7% over the same period. Notably, growing guest count remains McDonald’s top priority and it is undertaking various sales and digital initiatives to this end. Increased focus on delivery, enhancement of digital capabilities, and accelerated deployment of Experience of the Future restaurants in the U.S should drive growth too.

Efforts to attract customers in International Lead & High Growth Markets also bode well. In fact, global comps at McDonald’s have been positive over the past eight quarters. Yet, high labor costs and currency headwinds might keep profits under pressure.

Earnings estimates for the current year have declined over the last two months raising concerns. Even so, augmented focus on refranchising will cut the company’s capital requirements and facilitate EPS growth and ROE expansion in the long run.

(You can read the full research report on McDonald's here >>>).

Buy-rated Gilead’s shares have outperformed the Zacks Biotech industry in the last one year, increasing +13.8% vs. a decline of -6.8%. Gilead’s HIV franchise continues to gain traction, courtesy of the rapid adoption of TAF-based regimens in the United States and EU.

The TAF-based regimens now represent 62% of total HIV prescription volume following the launch of Genvoya, Odefsey and Descovy in 2016. The approval of Gilead’s latest triple HIV therapy, Biktarvy, is likely to provide an impetus to the stock as Gilead is now banking on its HIV franchise and newer avenues like the CAR-T therapy post Kite acquisition.

However, the HCV franchise is under tremendous pressure due to lower patient starts and increasing competition. Both pricing and market share are expected to stabilize by mid-2018 while patient starts are expected to decline further.

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

Other noteworthy reports we are featuring today include Celgene (CELG), Phillips 66 (PSX) and Lam Research (LRCX).

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Mark Vickery

Senior Editor

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

IBM Corp (IBM) Reiterates '18 View on Portfolio Strength

McDonald's (MCD) Gains From Re-Franchising, High Costs Ail

Gilead (GILD) Poised to Grow on HIV Franchise Strength

Featured Reports

Omnicom (OMC) to Benefit from Partnership with IRI

The Zacks analyst believes that Omnicom's partnership with IRI will enhance its digital and analytical capabilities and help it expand its global footprint.

Pilgrim's (PPC) to Grow on Portfolio Strategy & Acquisitions

The Zacks analyst thinks that ongoing portfolio strategy, GNP Company and Moy Park buyouts, as well as elevated demand for chicken products will boost Pilgrim's Pride's near-term results.

Portfolio Strength, Robust Demand Aids Lam Research (LRCX)

Per the Zacks analyst, robust demand for equipment and memory segment and strength in logic & foundry bodes well for Lam Research.

Loan Growth Aids New York Community (NYCB), Rising Rates Ail

The Zacks analyst thinks improving economy will support New York Community's loans and deposits.

iRobot (IRBT) Braves Market Rivalry With Robopolis Buyout

Per the Zacks analyst, the Robopolis acquisition and localization strategy will boost iRobot's near-term results.

Phillips 66's (PSX) Debt Load Offset by Chemical Unit Focus

The Zacks analyst believes that concerns regarding Phillips 66's high debt load will be offset by the company's focus on more profitable business units.

Juno Acquisition Boosts Celgene (CELG) Amid Pipeline Failures

Per the Zacks analyst, Revlimid should continue to drive growth for Celgene. The recent Juno acquisition should revive its pipeline given the recent failures.

New Upgrades

Alexion (ALXN) Poised to Grow on Strong Soliris Performance

Per the Zacks analyst, Alexion's drug Soliris continues to drive growth. The recently announced Wilson acquisition should strengthen its rare disease pipeline.

Met Coal Demand, Debt Reduction Aids Natural Resource (NRP)

The Zacks analyst believes Natural Resource Partners' initiatives to lower its outstanding debt levels and rising demand for metallurgical coal will boost its performance.

Productivity Improvement, Volumes to Aid Owens-Illinois (OI)

The Zacks analyst is upbeat about Owens-Illinois' expansion of JV with Constellation Brands. Focus on improving productivity across all businesses and positive volume trends will drive growth in 2018.

New Downgrades

Stiff Competition in General Surgery Unit Hurts CONMED (CNMD)

CONMED operates in a highly competitive environment, especially in the General Surgery business. The Zacks analyst is also pessimistic about the ongoing volatility in foreign exchange.

Temperature Control Segment Drags Standard Motor (SMP)

Per the Zacks analyst, cool summer has adversely hit sales of Standard Motor's Temperature Control segment. Also, heavier than normal inventories is restricting new orders.

Rogers Communications (RCI) Hurt By Weak Media Revenues

Per the Zacks analyst, Rogers Communications is hurt by softness in advertising market that is negatively impacting media revenues.

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McDonald's Corporation (MCD) : Free Stock Analysis Report
Lam Research Corporation (LRCX) : Free Stock Analysis Report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
Gilead Sciences, Inc. (GILD) : Free Stock Analysis Report
Celgene Corporation (CELG) : Free Stock Analysis Report
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