U.S. Markets close in 4 hrs 13 mins

Top Research Reports for Today: JNJ, SLB, HOM

Mark Vickery

Tuesday April 25, 2017

Today's Research Daily features new research reports on 16 major stocks, including Johnson & Johnson (JNJ), Schlumberger (SLB) and Honeywell (HON).

Johnson & Johnson shares have gained +8.9% over the last year, widely outperforming the large-cap pharma space (down -1.1%). J&J reported mixed Q1 results, beating on earnings but missing on sales. This was the second consecutive sales miss for J&J due to a slowdown in pharmaceutical product sales.

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

Shares of Schlumberger underperformed the Zacks Oil and Gas Field Services industry over the last one year, losing -6.4% vs. the sector’s -4.3% decline. The Zacks analyst likes the continuous and effective cost-management initiatives of the company. The Schlumberger-Cameron merger will support technology-driven growth, going forward. The company’s focus on international markets also deserves appreciation.

Moreover, Schlumberger’s first-quarter earnings were in line with expectations. This may be attributed to improvement in directional drilling works in North America. However, the bottom line decreased substantially on a year-over-year basis owing to slowdown of drilling works in the international market. Moreover, Schlumberger projected 2017 to be a challenging year for business outside North America. (You can read the full research report on Schlumberger here.)

Honeywell shares have outperformed the diversified operations industry gaining +12.1% vs. +2.1% in the year-to-date period. Moreover, Honeywell reported solid first-quarter 2017 results. The Zacks analyst like the company’s continuing efforts on increasing its presence in high-growth regions. Additionally it is building a robust pipeline of new products and has regularly fine-tuned its portfolio to focus on core businesses.

Diligent focus on working capital management, free cash flow generation and a conservative balance sheet remain key positive attributes. However, Honeywell expects a tepid demand pattern for its business jets and mobile scanners in 2017 due to sluggish global growth, volatility in crude oil prices and a tempered Chinese economy. High R&D expenditure to fend competition and stay ahead of technological obsolescence contracts margin and reduces bottom-line growth. (You can read the full research report on Honeywell here.)

Other noteworthy reports we are featuring today include Alphabet (GOOGL), Sherwin-Williams (SHW) and SunTrust Banks (STI).

Free Access: All Zacks Research Reports
Starting today, you are invited to download in-depth analysis reports covering more than 1,000 of the most widely followed stocks. Valued at $25 each, they are yours to consult over the next 30 days absolutely free. They feature sensitive Zacks Rank information on each stock that you won't find anywhere else. See the reports 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) Q1 Results Mixed; Pharma Sales Slowing Down

Schlumberger's (SLB) Q1 Earnings Meet Estimates, Fall Y/Y

Honeywell (HON) Beats Q1 Estimates, Strong Demand Raise Hope

Featured Reports

Sherwin-Williams (SHW) Tops in Q1, Faces Pricing Pressure

The Zacks analyst thinks that the company should gain from Valspar acquisition, expansion initiatives and cost control actions in 2017 amid headwinds from raw material price inflation.

Badger Meter (BMI) Posts Record Q1 Earnings Amid Macro Woes

The covering analyst thinks Badger Meter will grow on cost containment efforts and acceleration in large metering projects.

Zions' (ZION) Q1 Earnings Indicates Revenue Growth Ahead

The Zacks analyst opines an increase in loan demand and improving rate scenario will support Zions' revenue growth going forward.

SunTrust's (STI) Q1 Results Depict Continued Organic Growth

The covering analyst thinks SunTrust remains on track to grow organically supported by solid loan growth. However, the company's exposure to risky loan portfolios might hurt its financials.

United Rentals Inc. (URI) Tops Q1 Earnings, Rental Rate Down

United Rentals' earnings beat analysts' expectation by 3.2% and reported solid volume growth and record time utilization. Per the Zacks analyst, declining rental rates raise concern.

Pool (POOL) Tops Q1 Earnings & Sales; Well-Poised for Growth

Strong base business sales, market share gains and favorable weather led to Pool's robust results, per the Zacks analyst.

AMETEK (AME) Riding High on MOCON Acquisition

The Zacks analyst thinks MOCON acquisition will increase AMETEK's presence in the package testing market.

New Upgrades

Crown Holdings (CCK) Q1 Earnings, Revenues Up Y/Y

According to the Zacks analyst, Crown Holdings is well poised to gain from the rise in global beverage can demand. It will also benefit from potential strategic acquisitions.

Alphabet (GOOGL) Grows on Innovation and Diversification

The covering analyst believes that Alphabet's search market share is a big positive. This coupled with its focus on innovation, diversification and strategic acquisitions continues to drive growth.

Sun Life Financial's (SLF) Inorganic Growth Impresses

The Zacks analyst believes that Sun Life will continue to boost its inorganic growth through strategic acquisitions. Efforts to ramp up inorganic growth are well supported by strong capital position.

New Downgrades

Sohu's (SOHU) Q1 Loss Wider, Revenues Decline Y/Y

Sohu's Q1 results were marred by lower revenues from online games and brand advertising. The Zacks analyst expects strength in search and mobile business to be a of some help going ahead.

Alliance Data's (ADS) Q1 Earnings, Revenues Improve

Though Alliance Data's first quarter earnings meet estimates, the same improved year over year. Revenues bettered on both counts. Bottom-line of $18.50 on $7.7 billion revenues is expected for 2017.

Enbridge Energy Partners' (EEP) Near-Term Prospects Bleak

The covering analyst believes that the near-term prospects of Enbridge Energy are dull as the current business scenario is unfavorable owing to volatile oil and gas prices.

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
SunTrust Banks, Inc. (STI): Free Stock Analysis Report
Schlumberger N.V. (SLB): Free Stock Analysis Report
Sherwin-Williams Company (The) (SHW): Free Stock Analysis Report
Johnson & Johnson (JNJ): Free Stock Analysis Report
Honeywell International Inc. (HON): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research