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Top Research Reports for Merck, Adobe & Broadcom

Mark Vickery
Top Research Reports for Merck, Adobe & Broadcom

Monday, March 18, 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 Merck (MRK), Adobe (ADBE) and Broadcom (AVGO). 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 >>>

Merck’s shares have gained +6.7% year to date, significantly outperforming the Zacks Large Cap Pharmaceuticals industry, which has increased +3.7% over the same period. Merck’s new products like Keytruda, Lynparza, and Bridion are contributing meaningfully to the top line. Keytruda sales are gaining momentum with approval for additional indications, especially in the first-line lung cancer setting.

The Zacks analyst thinks Keytruda has strong growth prospects based on increased utilization, recent approvals for new indications and potential additional approvals worldwide. Animal health and vaccine products are also performing strongly and remain core growth drivers for Merck.

The company will continue to focus on cost-cutting initiatives to drive the bottom line. However, generic competition for several drugs and pricing pressure will continue to be overhangs on the top line. Rising competitive pressure on the diabetes franchise and products like Isentress (HIV), Zepatier (HCV) and Zostavax (vaccine) remains a concern.

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

Shares of Adobe have gained +15.7% over the past year, underperforming the Zacks Software industry which has increased +19.7% over the same period. Adobe reported strong fiscal first-quarter results. The results were helped by acquisitions, strong demand for its creative products and solid efforts for product innovation. It has been making great efforts toward establishing its presence in cloud-related software areas such as documents and marketing.

The Zacks analyst remains optimistic about Adobe’s market position, compelling product lines, continued innovation, solid adoption of Creative Cloud and Adobe marketing cloud. However, lower end-market demand and exposure to Europe remain overhangs. Also, higher expenses incurred on acquisitions will likely impact its bottom line.

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

Broadcom’s shares have outperformed the Zacks Electronics - Semiconductors industry over the past year, gaining +18.6% vs. a +10.8% increase. Broadcom reported mixed first-quarter fiscal 2019 results. The bottom line surpassed expectations but the top line missed the same.

The Zacks analyst thinks the company is benefiting from strong demand for its wireless solutions and expanding product portfolio, which makes it well-positioned to address the needs of rapidly growing technologies like IoT and 5G. Strong ties with leading OEMs across multiple target markets will help the company to gain key insights into the requirements of customers.

Further, Broadcom is a leading player in the semiconductor market based on its multiple target markets, accretive acquisitions and strong cash flow. Nonetheless, the company faces intensifying competition and integration risks due to frequent acquisitions. The company’s leveraged balance sheet and customer concentration continue to be headwinds.

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

Other noteworthy reports we are featuring today include Intuitive AstraZeneca (AZN), Public Storage (PSA) and Ross Stores (ROST).

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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

New Drugs Drive Merck's (MRK) Sales as Competition Soars

Adobe (ADBE) Counts on Creative Strength, Expenses A Concern

Broadcom (AVGO) Rides on Portfolio Strength & Acquisitions

Featured Reports

AstraZeneca (AZN) Looks Well Poised for Sales Growth in 2019

AstraZeneca returned to product sales growth in the second half of 2018 on the back of its newer drugs and looks confident of seeing sustained growth for several years, says the Zacks analyst.

Public Storage (PSA) Gains From Buyouts, Supply Woes Remain

Per the Zacks analyst, Public Storage is poised to gain from its high brand value, favorable demographic changes and strategic acquisitions. However, rising supply remains a concern.

Investments to Aid Sempra Energy (SRE), Aliso Canyon Leak Hurts

Per the Zacks analyst, steady infrastructural investments are expected to boost Sempra Energy's customer reliability.

Ross' (ROST) Merchandising Efforts Aid Growth, Costs Hurt

Per the Zacks analyst, merchandising actions strengthen Ross Stores' buying operations, facilitating purchase of trendy products at attractive prices.

Expansion Efforts Aid Extra Space (EXR), Supply Woes Linger

Per the Zacks analyst, Extra Space Storage's expansion through buyouts and third-party management platforms bode well.

Long-Term Capital Investments to Aid Pinnacle West (PNW)

Per the Zacks analyst, Pinnacle West's long-term capital expenditure in traditional generation, transmission & distribution lines will help it to serve customers efficiently.

Higher Demand Aids Kronos Worldwide (KRO), Input Costs Ail

While Kronos Worldwide faces headwinds from elevated raw material costs, it should benefit from higher demand for titanium dioxide (TiO2) across most market segments in 2019, per the Zacks analyst.

New Upgrades

Dril-Quip (DRQ) Banks on Robust Backlog, Balance Sheet

The Zacks analyst believes that $270-million backlog of subsea equipment as well as debt free balance sheet emphasizes Dril-Quip's strength.

Diversified Services Aid Charles River Associates (CRAI)

The Zacks analyst believes that a diversified business with offerings across functional expertise, client base and geographical regions significantly boosts Charles River Associates' top line.

Strategic Buyouts, Collaborations Aid Synchrony (SYF)

Per the Zacks analyst, strategic buyouts like Loop Commerce and PayPal Credit financing program and tie-ups with Google, eBay, Qurate Retail Group and Amazon has led to significant growth.

New Downgrades

Escalating Expenses Weigh on Brown & Brown's (BRO) Margin

Per the Zacks analyst, Brown & Brown has been experiencing rising expenses attributable to higher compensation and operating expenses that in turn are weighing on margin expansion.

Oversupply, High Disposals to Hurt Equity Residential (EQR)

Per the Zacks analyst, Equity Residential's growth tempo is likely to slow down amid elevated supply of apartments. Also, higher asset dispositions will likely result in near-term earnings dilution.

Weak PharMEDium, Lash Units Hurt AmerisourceBergen (ABC)

Lackluster performance of AmerisourceBergen's PharMEDium and Lash units raise concerns. The Zacks analyst is also pessimistic about stiff competition in the MedTech space.

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Ross Stores, Inc. (ROST) : Free Stock Analysis Report
Public Storage (PSA) : Free Stock Analysis Report
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
AstraZeneca PLC (AZN) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
Adobe Systems Incorporated (ADBE) : Free Stock Analysis Report
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