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Top Research Reports for Johnson & Johnson, Boeing & Starbucks

Mark Vickery
Top Research Reports for Johnson & Johnson, Boeing & Starbucks

Monday, January 28, 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 Johnson & Johnson (JNJ), Boeing (BA) and Starbucks (SBUX). 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 >>>

Johnson & Johnson’s shares have underperformed the Zacks Large Cap Pharmaceuticals in the past year, losing -10.8% vs. -6.6%. J&J beat estimates for both earnings and sales in Q4. J&J’s sales growth accelerated in 2018 backed by above-market sales growth in the Pharmaceutical segment and improving performance in Medical Devices unit.

However, J&J’s sales growth guidance for 2019 was below expectations due to generic/biosimilar headwinds in the Pharma unit, which is expected to hurt sales by $3 billion in 2019. The Zacks analyst thinks J&J’s sales and earnings growth will accelerate in 2020 supported by drug launches, successful label expansion of cancer drugs like Imbruvica and Darzalex and immunology drug, Stelara.

J&J is also making rapid progress with its pipeline and line extensions. Meanwhile, share buybacks and restructuring initiatives should provide bottom-line support. Headwinds like biosimilar/generic competition and pricing pressure remain.

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

Shares of Strong Buy-ranked Boeing have gained +6.9% over the past year, outperforming the Zacks Aerospace & Defense industry, which declined -8.4% during the same time period. The Zacks analyst emphasizes that the company is the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries.

The company’s 20-year market outlook forecasts commercial jetliner demand to increase by 4.1%, with single-aisle jets being the major driver behind this demand growth. Boeing expects the commercial fleet to be fueled by sustained annual growth in commercial passenger traffic along with a big wave of retiring, old planes.

Boeing’s strong balance sheet and cash flows provide financial flexibility in matters of incremental dividend, ongoing share repurchases and earnings accretive acquisitions. However, the aerospace giant may face competitive challenges if new manufacturers like China enter the commercial jet space. Engine-related issues pertaining to its 787 fleet may also hurt the company's growth.

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

Buy-ranked Starbucks’ shares are up +29.2% over the past six months, outperforming the Zacks Food & Restaurants industry, which is up +13.6% over the same period. The Zacks analyst thinks the uptrend is likely to continue as the company not only reported impressive first-quarter fiscal 2019 results but also raised its earnings outlook for the fiscal year.

Notably, both the top and bottom lines surpassed the Zacks Consensus Estimate for the third successive quarter. Robust Americas and China comparable store sales too bode well. Also, the company’s operating fundamentals such as solid global footprint, successful innovations, best-in-class loyalty program and digital offerings are encouraging.

Again, digital initiatives like mobile order/pay and delivery services can further stimulate robust sales trends. Starbucks partnership with Nestle SA will also drive growth. However, operating margin contraction over the past few quarters has been a major concern. Being a retail restaurant, Starbucks is dependent on consumer discretionary spending environment.

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

Other noteworthy reports we are featuring today include Valmont Industries (VMI), Norfolk Southern (NSC) and Prologis (PLD).

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>

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

J&J's (JNJ) Sales Up in 2018, Forecast for 2019 Sales Soft

Growing Jet Demand, Strategic Acqusitions Aid Boeing (BA)

Starbucks' (SBUX) Strong Global Footprint to Drive Growth

Featured Reports

Volume Growth Buoys Norfolk Southern (NSC) Amid Debt Woes

The Zacks analyst likes the increase in in overall volumes at Norfolk Southern. Efforts to reward shareholders also raise optimism.

High Industrial Real Estate Demand to Drive Prologis (PLD)

Per the Zacks analyst, Prologis is well poised to benefit from high demand for industrial real estate space. Trade tensions and rising supply remain concerns.

Investments Aid American Electric (AEP), Rate Dependency Hurts

Per the Zacks analyst, plans to invest $24 billion over 2018-2021 period in regulated operations will boost earnings.

Grainger (GWW) Rides on Productivity Initiatives, Costs Ail

Per the Zacks analyst, cost saving and productivity initiatives, investment in e-commerce, and digital capabilities will drive growth.

Marketing, Freight Costs a Worry for McCormick (MKC) Profits

McCormick continues to undertake increased brand marketing to drive sales. Per the Zacks analyst, costs associated with these investments and persistence of high freight costs is a threat to profits.

NVR (NVR) Rides on Solid Business Model, Gross Margin Soft

Per the Zacks analyst. NVR's performance banks on its business model which focuses on maximizing liquidity and minimizing risk.

New Product Launches to Aid Hill-Rom (HRC) Amid Forex Woes

The Zacks analyst is impressed with Hill-Rom progressing strongly with its aim to report $400 million from new products in 2019.

New Upgrades

Sony (SNE) Spurs Growth on Leaner Organizational Structure

Per the Zacks analyst, continued focus toward attaining a leaner organizational structure has helped Sony to generate sustainable profit, accelerate decision-making and boost business competitiveness.

Wireless Subscriber Growth Aids Rogers Communication (RCI)

Per the Zacks analyst, solid postpaid subscriber gains in wireless segment and increasing Internet user count is benefiting Rogers Communication.

Strategic Buyouts, Collaborations Aid Synchrony (SYF)

Per the Zacks analyst, the company's strategic buyouts like Loop Commerce and PayPal Credit financing program and partnerships with Google, eBay and Amazon has led to significant growth.

New Downgrades

High IBG Dependence, Costs Hurt Interactive Brokers (IBKR)

Per the Zacks analyst, Interactive Brokers' significant financial dependence on the IBG LLC is a major concern. Also, mounting non-interest expenses will likely hurt bottom line growth to some extent.

Permian Cost Inflation to Weigh on Helmerich & Payne (HP)

The Zacks analyst is concerned over the creeping service cost inflation in the Permian Basin region, where Helmerich & Payne is a market leader and operates 118 rigs.

Weak Farm Income, Utility Segment Woes Hurt Valmont (VMI)

Per the Zacks analyst, low farm income and uncertainties around trade are hurting Valmont's irrigation unit. Also, its utility business faces a challenging wind market environment in Northern Europe.

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Valmont Industries, Inc. (VMI) : Free Stock Analysis Report
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Norfolk Southern Corporation (NSC) : Free Stock Analysis Report
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