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Top Research Reports for Merck, PayPal & Royal Dutch Shell

Mark Vickery

Wednesday, May 6, 2020

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), PayPal (PYPL) and Royal Dutch Shell (RDS.A). 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 underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-0.2% vs. +11.1%). The Zacks analyst believes that drugs like Keytruda, Lynparza and Bridion are driving sales. Keytruda sales are gaining from continued uptake in lung cancer and increasing usage in other cancer indications.

Animal health and vaccine products remain core growth drivers. The potential separation into two companies makes strategic sense as the remaining Merck should be able to achieve higher profits than the combined company. 

However, Merck expects the COVID-related business disruptions to hurt sales in its Pharmaceuticals as well as Animal Health units in 2020. Meanwhile, generic competition for several drugs and rising competitive pressure, mainly on the diabetes franchise will continue to be overhangs on the top line.

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

Shares of PayPal have gained 27.2% over the past six months against the Zacks Internet Software industry’s rise of 18.9%. The Zacks analyst believes that robust mobile checkout services of One Touch are contributing to the company’s total payment volume growth. Growing momentum across core peer to peer is also aiding in acceleration of payment volume.

PayPal’s portfolio strength remains its key catalyst. Venmo’s improving monetization efforts and rising adoption rate across various platforms are aiding total active accounts. Additionally, the company is benefiting from well-performing core PayPal and Braintree. Positive contributions from Hyperwallet buyout are tailwinds.

However, eBay’s managed payments transition remains a concern. Moreover, declining eBay volume remains a headwind for the company’s TPV. Moreover, PayPal anticipates Honey and GoPay buyouts to limit earnings growth in 2020.

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

Royal Dutch Shell’s shares have lost 37.9% over the past three months against the Zacks International Integrated Oil industry’s fall of 30.3%. The Zacks analyst believes that the company's position as a key supplier of LNG should benefit its long-term cash flow growth on the back of attractive growth opportunities.

Royal Dutch Shell’s Q1 earnings beat was overshadowed by its historic dividend cut. While Europe's largest oil company surpassed profit expectations on higher LNG sales volumes, the commodity price collapse forced the supermajor to trim its payout for the first time since World War II.

Shell is also making solid progress toward the transition to a renewable energy-focused future. But there are worries over the company’s drop in upstream production and its poor reserve replacement ratio.  

(You can read the full research report on Royal Dutch Shell here >>>)

Other noteworthy reports we are featuring today include BlackRock (BLK), ServiceNow (NOW) and General Electric (GE).

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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

Merck (MRK) Expects Coronavirus to Hurt Sales in 2020

PayPal (PYPL) Benefits From Increasing Total Payment Volume

Royal Dutch Shell (RDS.A) to Gain from Growing LNG Demand

Featured Reports

Buyouts, Assets Balance Aid BlackRock (BLK) Amid High Costs

Per the Zacks analyst, opportunistic acquisitions, solid assets under management balance and focus on the active equity business will aid BlackRock. However, mounting costs remain a key concern.

Growing Customer Base & Partnerships Aid ServiceNow (NOW)

Per the Zacks analyst, ServiceNow benefits from rising adoption of its workflows from companies undergoing digital transformation. Also, strategic alliances with the likes of Microsoft are a tailwind.

Solid Liquidity to Aid General Electric (GE), Virus-Woes to Ail

Per a Zacks analyst, General Electric's (GE) solid liquidity position will help it tide over the financial burden caused by the pandemic.

eBay (EBAY) Rides on Solid Momentum Across Managed Payments

Per the Zacks analyst, eBay is benefiting from strengthening managed payments offerings which deliver better shopping experience.

Investment Plan Aids Edison International (EIX), Costs Hurt

Per the Zacks Analyst, the company's robust capital plan will help in driving earnings base growth. Inability to recover uninsured wildfire-related costs may also affect financial condition.

Operating Ratio Aids Old Dominion (ODFL) Amid Volume Woes

The Zacks analyst is optimistic about improvement in operating ratio owing to low costs.

Fuel Costs Aid United Airlines (UAL), Passenger Revenues Ail

The Zacks analyst is pleased with the dip in fuel costs (down 7.3% in first-quarter 2020). However, low air-travel demand is inducing depressed passenger revenues (down 19% in the period).

New Upgrades

Emergent (EBS) Rides High on Robust Vaccine Portfolio Sales

Per the Zacks analyst, Emergent's vaccine portfolio holds great potential with the newly-acquired Narcan nasal spray progressing well. Its COVID-19 vaccine manufacturing agreements also holds promise.

Cost-Cutting Actions to Aid Nordstrom (JWN) Amid Coronavirus

Per the Zacks analyst, Nordstrom is cutting 20% of overhead costs by permanently closing 16 full-line stores, restructuring areas and adjusting supply chain to stay afloat amid coronavirus pandemic.

Nexeo Buyout, Productivity Actions to Aid Univar (UNVR)

According to the Zacks analyst, Univar should gain from synergies of the Nexeo acquisition. Moreover, cost savings through productivity actions should support the company's margins.

New Downgrades

Weak Lodging Demand Hurting Host Hotels' (HST) Performance

Per the Zacks Analyst, weak lodging demand due to the coronavirus pandemic is a major concern for Host Hotels & Resorts (HST). High supply in some markets adds to its woes.

Coronavirus Impacts Hurt Textron's (TXT) Operating Results

Per the Zacks analyst, COVID-19 pandemic adversely impacted revenues and segment profit for Textron's commercial businesses, as airline industry suffered following decline in air travel demand.

High Costs, Intense Competition Hurt UMB Financial (UMBF)

Per the Zacks Analyst, rising costs due to UMB Financial's investment in technology and building distribution networks remains a concern. Also, competition from fintechs and online lenders is a woe.

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Royal Dutch Shell PLC (RDS.A) : Free Stock Analysis Report
PayPal Holdings Inc (PYPL) : Free Stock Analysis Report
ServiceNow Inc (NOW) : Free Stock Analysis Report
Merck Co Inc (MRK) : Free Stock Analysis Report
General Electric Company (GE) : Free Stock Analysis Report
BlackRock Inc (BLK) : Free Stock Analysis Report
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