U.S. Markets closed

Top Research Reports for Today: JNJ, VZ, V

Mark Vickery

Friday, April 7, 2017

Today's Research Daily features new research reports on 16 major stocks, including Johnson & Johnson (JNJ), Verizon (VZ) and Visa (V).

Johnson & Johnson shares have gained +14.6% over the last year, widely outperforming the large-cap pharma space (up +2.1%). While the company is faced with a number of headwinds like unfavorable currency movements, increased competition from generics, pricing pressures and an uncertain global macroeconomic backdrop, the Zacks analyst believes that JNJ's diversified business model, deep product pipeline, lack of cyclicality and financial strength position it for continued momentum going forward.

Also, the potential Actelion buyout, though expensive, will bolster J&J’s long-term growth. However, in 2017, growth in J&J’s Pharma segment is expected to suffer as key growth drivers have slowed down due to competition. Estimates have remained mostly stable lately ahead of the Q1 earnings results. (You can read the full research report on Johnson & Johnson here.)

Shares of Verizon have been laggards over the past year- the stock is down -7.2% over the past 12 months vs. AT&T's +5.5% gain and the +14.4% gain for the S&P 500 index. Verizon has started conducting 5G wireless network trials in 11 U.S. cities and plans to deploy its fixed wireless version in 2018. The company’s decision to launch FiOS Prepaid plan, FiOS Internet service and to zero-rate its data on FiOS Mobile App should help it gain subscribers while unlimited data plans have heated up the wireless industry.

The Verizon-Yahoo deal underwent a discount revision of $350 million. But it will likely take a while before these actions bear fruit. In the updated research report issued today, the Zacks analyst discusses the pros & cons of investing in Verizon shares at this stage. (You can read the full research report on Verizon here.)

Buy rated Visa’s shares have marginally underperformed the Zacks Financial Transaction Services industry over the past one year, gaining +14.2% vs. +14.8%. The Zacks analyst likes the company’s strategic acquisitions and alliances, technology upgrades and effective marketing efforts.

Visa is experiencing growth from acquisition of Visa Europe and solid growth in payments volume as well as processed transactions. In addition, global economic uncertainty and legal headwinds are major concerns. Higher client incentives also pose a risk on profitability. (You can read the full research report on Visa here.)

Other noteworthy reports we are featuring today include Colgate-Palmolive (CL), General Dynamics (GD) and Abbott (ABT).

The Best & Worst of Zacks

Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 11X worse than the market.  See these critical buys and sells free >>

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 (JNJ) Boasts Deep Pipeline; Pharma Sales to Slow Down

Verizon (VZ) to Launch Online TV Streaming Service Amid Risks

Visa (V) Grows on Digital Initiatives, Pacts & Alliances

Featured Reports

Raytheon (RTN) Grows on Defense Contracts, Competition Rife

The Zacks analyst thinks ample contract wins from Pentagon boosts Raytheon's growth. Yet it operates in a highly competitive industry and needs to make investments to sustain in the market.

Simon Property (SPG) Grows Global Assets, Online Sales a Woe

The covering analyst thinks Simon Property's efforts to enhance its retail portfolio globally is encouraging. Yet, rising online sales is a concern as it curbs retail real estate space demand.

General Dynamics' (GD) Broad Portfolio Impress, Rivalry a Woe

The Zacks analyst thinks General Dynamics' revenues are derived from a broad portfolio of products and services that help to keep the overall growth momentum steady.

Constellation Brands (STZ) Q4 Earnings Beat; Dividend Hiked

The Zacks analyst thinks Constellation Brands' superb fourth quarter results were driven by solid buyouts; higher margins and strong beer business trends.

Strong EPD, St. Jude Integration Raise Hopes for Abbott (ABT)

Despite Alere buyout related legal plights, the Zacks analyst is positive about Abbott on the on-going St. Jude integration.

ADP's (ADP) Customer Retention Ratio a Major Positive

The covering analyst likes the company's higher revenue per client and decent customer retention ratio.

Kellogg's (K) Cost Saving Plans to Spur Growth, Sales Weak

The Zacks analyst thinks cost savings from Kellogg's re-structuring program, Project K, have been supporting renovation, innovation, brand support and margins.

New Upgrades

Colgate's (CL) Solid Strategies and Brand Strength Bode Well

The Zacks analyst thinks Colgate expects organic sales growth in 2017, despite currency woes. This reflects Colgate's confidence in its brands and strategies. Its recent dividend hike also bodes well.

Equinix's (EQIX) IBX Expansion Strategy to Boost Revenues

The covering analyst thinks that Equinix's aggressive IBX expansion strategy will fortify its global footprint in the data center space and bring additional revenues in the long run.

SEI Investments (SEIC) Well Poised for Organic Growth

The Zacks analyst thinks SEI Investments is focused on organic growth, given its innovative and diverse global investment products and services. Also, robust asset growth will support profitability.

New Downgrades

Competition in HCIT Market Space Hurting Cerner's (CERN) Growth

The Zacks analyst believes that tough competition in the Healthcare & Information Technology (HCIT) market exerts considerable pressure on both pricing and margins of Cerner.

Blackstone (BX) Continues to Face Stringent Regulatory Woes

The covering analyst believes that Blackstone continues to face the adverse effects of ongoing volatility in the capital market and stringent regulations.

Intercontinental Exchange's (ICE) Rising Expenses a Major Concern

The Zacks analyst thinks Intercontinental Exchange's expenses will continue to rise due to strategic initiatives. Management expects adjusted operating expenses to be $1.94-$1.98 billion in 2017.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Verizon Communications Inc. (VZ): Free Stock Analysis Report
Visa Inc. (V): Free Stock Analysis Report
Johnson & Johnson (JNJ): Free Stock Analysis Report
General Dynamics Corporation (GD): Free Stock Analysis Report
Colgate-Palmolive Company (CL): Free Stock Analysis Report
Abbott Laboratories (ABT): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research