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Top Research Reports for March 9, 2017

Mark Vickery

Thursday, March 9, 2017

Today's Research Daily features new research reports on 16 major stocks, including IBM (IBM), Celgene (CELG), and Shell (RDS.A).

IBM shares have turned around over the last one year (up +28% vs. +19.5% for the Zacks Technology sector) on greater appreciation for the company's outlook. The Zacks analyst highlights IBM's recent investor briefing, which showed that focus on cloud computing (hybrid cloud), new market penetration, cognitive technologies and artificial intelligence are key growth catalysts. In this regard, the recently announced collaboration with salesforce is positive for the Watson business.

In addition, tuck-in acquisitions will lead to incremental revenues, strengthening its technology leadership and resulting in a more favorable mix of business. However, sluggish IT spending particularly on on-premise and data center hardware and foreign exchange volatility remain concerns. (You can read the full research report on IBM here.)

Shares of Celgene shares have gained 6.3% year to date, underperforming the Zacks Medical - Biomedical and Genetics sector which has gained 8.1% over the same period. Celgene and other drug makers’ shares have remained under pressure given ongoing questions about pricing issues and other regulatory uncertainties.

These issues notwithstanding, Celgene’s multiple myeloma drug Revlimid continues to grow on the back of market share gains and increased duration. The Zacks analyst likes Celgene’s ongoing label expansion efforts and pipeline development. The company anticipates several pipeline-related events over the upcoming quarters and next few years. Fourth-quarter results were disappointing but the company’s outlook for 2017 was encouraging. (You can read the full research report on Celgene here.)

Buy rated Shell shares have marginally underperformed the Zacks Integrated Oil industry over the past six months (up +2.6% vs. +3.4% gain for the industry). However, they have outperformed smaller rival BP over the same period (down -3.8%). The Zacks analyst likes the company's strong and diversified portfolio of development projects that offer attractive long-term opportunities. While the Buy-rated supermajor has been able to manage its expenses and progress on its large divestment program, the remarkable speed of its BG integration is what stands apart.

Additionally, Shell's upstream unit swung to a Q4 profit from a year-ago loss. Rebounding oil price, together with higher output helped the company report a quarterly E&P profit. Shell's near-term dividend outlook also looks good with the company delivering on its pledge to sustain the payout. (You can read the full research report on Shell here.)

Other noteworthy reports we are featuring today include Oracle (ORCL), Zoetis (ZTS) and Microchip (MCHP).

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Sheraz Mian

Director of Research

Note: Note: Sheraz Mian regularly provides earnings analysis on Zacks.com and appears frequently in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview.

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Today's Must Read

IBM (IBM) Focuses on Hybrid Computing, A.I. For Growth

Celgene's (CELG) Revlimid To Drive Growth in 2017, View Upbeat

BG Acquisition Boosts Royal Dutch Shell's (RDS.A) Outlook

Featured Reports

Microchip (MCHP) Benefits from Product Expansion; Stock Up

According to the Zacks analyst Microchip's impressive performance in the last 12 months can be primarily attributed to expanding product portfolio and growing analog business.

Motorola's (MSI) Expansion & Investor-friendly Moves Impress

The covering analyst is impressed by the company's strategy of growing through mergers and acquisitions. Efforts to reward investors through dividend payments and buybacks also raise optimism.

Allegion (ALLE) Benefits from Acquisitions, Fx Woes Stay

The Zacks analyst thinks Allegion's acquisitions, focus on innovation and solid footprint in the emerging markets are encouraging.

H&R Block (HRB) Q3 Loss Narrows, Cost Cutting Raises Hope

H&R Block remains focused on expanding client base and lowering costs to drive future growth.

Orbital ATK (OA) Q4 Earnings Miss Estimates, Gives '17 View

The covering analyst believes Orbital ATK's wide array of products, robust backlog and merger synergies will boost performance going forward.

Joy Global's (JOY) Q1 Loss Wider than Expected, Revenues Lag

The Zacks analyst believes Joy Global's restructuring initiatives will help it to overcome the challenges posed by the cautious steps taken by the miners in developing their mining projects.

Sarepta (SRPT) Q4 Loss Wider; Exondys 51 Sees Slow Launch

The Zacks analyst thinks Sarepta's 2017 sales outlook was below expectations because the commercial launch of its only approved drug, Exondys 51, was slow.

New Upgrades

Zoetis' (ZTS) Companion Animal Business To Drive Growth

The Zacks analyst thinks that Zoetis' companion animal business is likely to continue perform well due to higher global sales of Apoquel and other new products.

Sonoco (SON) to Gain from Growth Actions Amid Headwinds

The covering analyst expects Sonoco to gain from expanding global production units, product launches and growth projects. But slowdown in manufacturing and higher input costs are concerns.

UDR Inc. (UDR) to Gain from Portfolio Strength

The Zacks analyst thinks with superior portfolio in targeted U.S. markets & disciplined capital allocation, UDR is well poised to grow. But, elevated deliveries in some markets pose concerns.

New Downgrades

Tenet Healthcare (THC) Hurt by High Debt, Rising Expenses

The Zacks analyst views the earnings miss for the third consecutive quarter negatively. Rising expenses, high leverage, loss on health plan business will continue to exert pressure on margins.

Deutsche Bank (DB) Threatened by Margin & Litigation Pressure

The covering analyst thinks Deutshe Bank's profitability remains threatened by a stressed operating environment with negative interest rates. Moreover, litigation burden remain a concern.

Oracle's (ORCL) Transition to the Cloud a Drag on Financials

The Zacks analyst believes that Oracle's transition to the cloud-based business model remains a drag on the financials at present. Moreover, litigation matters remain concerning for the company.

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Zoetis Inc. (ZTS): Free Stock Analysis Report
Royal Dutch Shell PLC (RDS.A): Free Stock Analysis Report
Oracle Corporation (ORCL): Free Stock Analysis Report
Microchip Technology Incorporated (MCHP): Free Stock Analysis Report
International Business Machines Corporation (IBM): Free Stock Analysis Report
Celgene Corporation (CELG): Free Stock Analysis Report
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