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Top Stock Reports for Johnson & Johnson, NextEra & Deere

Mark Vickery

Thursday, July 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 Johnson & Johnson (JNJ), NextEra (NEE) and Deere (DE). 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 >>>

Johnson & Johnson's shares have outperformed the Zacks Large Cap Pharmaceuticals industry so far this year (+2.2% vs. -1.2%). J&J beat estimates for earnings and sales in Q2 and raised the 2019 guidance for operational sales growth for the second time this year.

The Zacks analyst thinks J&J is witnessing significant generic/biosimilar headwinds in its Pharma unit in 2019. However, J&J’s sales and earnings growth is expected to accelerate in 2020 supported by contribution from new drugs like Tremfya and successful label expansion of cancer drugs like Imbruvica and Darzalex and immunology drug, Stelara.

J&J is also making rapid progress with its pipeline and line extensions. It has already gained FDA approval for two new drugs in 2019, Balversa and Spravato. Headwinds like biosimilar/generic competition and pricing pressure remain. The talc and opioid litigations are overhangs on the stock.

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

Shares of NextEra have outperformed the Zacks Electric Power industry in the past year, gaining +23.3% vs +11.8%. The Zacks analyst thinks NextEra’s investments to strengthen renewable operations through “30 by 30” plan will help the company to continue as a market leader in renewable power generation. Focus on expanding operations in natural gas pipelines and further expansion of business through acquisitions and organic growth have positively impacted earnings. 

However, its nature of business is subject to complex and comprehensive federal, state, and other regulations. Substantial investments are undertaken to ensure the safety of nuclear operations. If planned outages last longer than expected, or there is an unplanned outage normal operations and profitability might be hindered.

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

Deere’s shares have gained +16.2% in the past year, underperforming the Zacks Farm Equipment industry, which has increased +14.3% over the same period. For fiscal 2019, Deere expects net sales to increase 5% year over year. Concerns stemming from the U.S-China trade war and lower commodity prices have led to farmers getting cautious about their equipment purchases.

However, the Zacks analyst thinks the $16 billion aid program for American farmers impacted by the trade war is likely to bolster agricultural equipment sales, which bodes well for Deere. Improving construction markets and the Wirtgen acquisition, which has increased Deere's exposure to global transportation infrastructure, will benefit results.

Additionally, introduction of advanced technologies in its products will aid growth. However, raw material cost inflation, elevated expenses and unfavorable foreign currency impact remain near-term headwinds.  

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

Other noteworthy reports we are featuring today include Vertex (VRTX), Cintas (CTAS) and Canadian Pacific (CP).

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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

J&J (JNJ) Facing Generic Woes in 2019, Recovery Likely in 2020

Investment in Renewables, Infrastructure Aid NextEra (NEE)

Construction Demand, Acquisition Aid Deere (DE), Costs Ail

Featured Reports

Cost Cuts & Dividends Aid Canadian Pacific (CP), Debts Ail

The Zacks analyst is impressed with the company's efforts to check costs and reward its shareholders. Escalated debt levels, however, raise a concern.

Amplify Buyout Likely to Continue Driving Hershey (HSY)

Per the Zacks analyst, Hershey is steadily gaining from the buyout of Amplify. This acquisition, which boosted the top line during the first quarter, is expected to continue yielding positively.

Cintas (CTAS) Rides On New Product Offerings, High Costs Ail

Per the Zacks analyst, impressive traction of Cintas' Uniform Rental & Facility Services segment, supported by improved product offerings should drive its sales.

Palo Alto (PANW) Rides on Acquisitions, Partnerships

Per the Zacks analyst, Palo Alto's acquisitions, such as RedLock and Demisto, are widening its portfolio, thus boosting top line.

Cost-Based Productivity Efforts Aid Whirlpool's (WHR) Bottom Line

Per the Zacks analyst, Whirlpool is on track with cost-based price increments and efforts to cut fixed costs to improve business efficiency.

Harley (HOG) Rides on Technology Investments Amid Tariff Woes

Per the Zacks analyst, Harley's investments in technology, along with its marketing and sales support, is driving its revenues.

Whiting (WLL) to Gain From Bakken Assets Amid Redtail Woes

The Zacks analyst is impressed by Whiting Petroleum's top-tier acreage in the Bakken shale play.

New Upgrades

Vertex's (VRTX) Cystic Fibrosis Triple Combo Likely to Drive Growth

Vertex will soon file regulatory application for VR-445 triple combination cystic fibrosis regimen. The Zacks analyst points out that this regimen has the potential to treat up to 90% of CF patients.

Network Expansion & Foreign Acquisitions Aid Copart (CPRT)

Per the Zacks analyst, Copart is expanding its network facilities to manage inflating volumes. It is also integrating several foreign acquisitions for its benefit.

Lamar (LAMR) to Gain From Portfolio Upgradation & Expansion

Per the Zacks analyst, Lamar's efforts to upgrade its portfolio will likely boost display occupancy and advertising rates. Strategic buyouts also position the company for long-term growth.

New Downgrades

High Operating Costs & Legal Issues Hurt Citizens (CFG)

Per the Zacks analyst, mounting expenses due to Citizen Financial's investments in technology owing to its business initiatives remain a major headwind. Further, legal issues remain a woe.

Soft Blood Center Sales Impede Haemonetics' (HAE) Growth

The Zacks analyst is worried about Haemonetics' persistent decline in blood center revenues on account of adverse pricing pressure. Also, competitive landscape remains a threat.

Rising Material & Freight Costs to Hurt Armstrong World (AWI)

Per the Zacks analyst, higher freight and raw material costs have been impacting Armstrong World's operating profits.

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Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Deere & Company (DE) : Free Stock Analysis Report
Cintas Corporation (CTAS) : Free Stock Analysis Report
Canadian Pacific Railway Limited (CP) : Free Stock Analysis Report
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