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Top Stock Reports for Medtronic, TJX Companies & Deere

Mark Vickery

Friday, May 24, 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 Medtronic (MDT), TJX Companies (TJX) 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 >>>

Medtronic’s shares have outperformed the Zacks Medical Products industry in the past year, gaining +6.2% vs. +1.2%. Medtronic exited fiscal 2019 on a promising note with better-than-expected fourth-quarter numbers. Barring the Diabetes group, all major business groups contributed to solid top-line growth at CER.

The Zacks analyst thinks that within RTG, the launch of the Mazor X Stealth navigated robotic system is off to a strong start. Diabetes group, although registered a dull quarter this time, the company expects this business to reaccelerate in the first quarter and be accretive to total company growth in fiscal 2020. Within CVG, despite ongoing challenges, multiple product lines showed exceptional strength in the quarter.

The 2020 guidance also looks promising. On the flip side, the declining CRHF revenue raises concern for Medtronic. Escalating costs persistently put pressure on gross margins.

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

Shares of Buy-ranked TJX Companies’ have underperformed the Zacks Discount Stores industry over the past three months, gaining +5.6% vs. a +7.1% increase. However, the Zacks analyst thinks the company is likely to put up an above-average performance in the near term.

The company is set to benefit from robust comps, which have been gaining from continued rise in consumer traffic and strong merchandising policies. These factors along with TJX Companies’ off-price model, strategic store locations and impressive brands have been driving its store and online performance. This was visible in the company’s first-quarter fiscal 2020 results, wherein customer traffic rose for the 19th straight time.

Management is encouraged about witnessing continued growth, evident from its raised earnings view. Also, the company’s shareholder-friendly moves reflect its solid financial status. However, the company has been witnessing high wage costs, which along with elevated freight costs are likely to hit EPS growth in fiscal 2020. Also, volatile currency movements pose threats.

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

Deere’s shares have lost -8.5% year to date, underperforming the Zacks Farm Equipment industry, which has declined -6.5% over the same period. Deere reported year-over-year improvement in both adjusted earnings per share and revenues in second-quarter 2019. While the top line beat expectations, the bottom line missed.

For fiscal 2019, Deere anticipates net sales to increase about 5% year over year and net income at $3.3 billion. The Zacks analyst thinks concerns over the U.S-China trade war, lower commodity prices and delayed planting season in North America led farmers to become cautious about their equipment purchases.

However, the recently announced $16 billion aid program for American farmers impacted by the trade war is likely to boost agricultural equipment sales. Improving construction markets, the Wirtgen acquisition and introduction of advanced technologies in its products will also aid growth. However, raw material cost inflation, elevated expenses and unfavorable foreign currency impact will hurt results.

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

Other noteworthy reports we are featuring today include Consolidated Edison (ED), Incyte (INCY) and Netapp (NTAP).

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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

RTG Arm Growth Boosts Medtronic (MDT), CRHF Challenges Remain

TJX Companies' (TJX) Sturdy Comps Run to Boost Top Line

Construction Demand, Wirtgen Buy Aid Deere (DE), Costs Ail

Featured Reports

Investments Aids Consolidated Edison (ED), Regulations Hurt

Per the Zacks analyst, company's systematic capital investment plan for infrastructure development bolsters growth prospects.

Strong Jakafi Boosts Incyte (INCY) Amid Pipeline Setbacks

Per the Zacks analyst, Incyte's lead drug, Jakafi maintains momentum driven by strong demand. Incyte's efforts to diversify its revenue base are encouraging, but pipeline setbacks are a concern.

Strong Adoption of Flash & HCI Solutions Aids Netapp (NTAP)

Per the Zacks analyst, persistent innovation in flash-based solutions and strong adoption of hyper-converged infrastructure (HCI) will continue to benefit Netapp's top-line growth.

Order Strength to Aid TechnipFMC's (FTI) Revenue Visibility

The Zacks analyst believes that higher inbound orders in TechnipFMC's Onshore/Offshore and Subsea units signal improved revenue visibility.

Growing Revenues Aid Euronet (EEFT), Escalating Costs Hurt

Per the Zacks analyst, rising topline on the back of solid segmental results and diversity across products and geographies has led to significant growth.

Jazz (JAZZ) Gets Approval for Sunosi, Boosts Sleep Franchise

Per the Zacks analyst, the FDA's approval for Sunosi is likely to boost Jazz's sleep franchise which continues to perform well on the back of strong demand for Xyrem.

Systematic Capital Expenditure Plan to Aid UGI Corp (UGI)

Per the Zacks analyst, UGI Corporation is poised to benefit from long-term investment plans, aimed at strengthening its existing businesses and expanding its presence in the global markets.

New Upgrades

Strong Demand & Cost Cuts Aid International Flavors (IFF)

Per the Zacks analyst, International Flavors is benefiting from increasing global demand for consumer products containing flavors and fragrances, the Frutarom acquisition and cost cutting efforts.

Assets Growth, Inflows Support Eaton Vance (EV) Revenues

The Zacks analyst believes that improving assets under management balance, steady inflows and Eaton Vance's diverse product offerings and investment strategies will continue supporting revenues.

Loan Growth, Focus on Fee Income Support BankUnited (BKU)

Per the Zacks analyst, steady loan growth, focus on growth in non-interest income and a change in deposit mix will support BankUnited. Moreover, the bank's capital deployment plans are impressive.

New Downgrades

High SG&A Costs, Tariffs to Hurt Kohl's (KSS) Bottom Line

Per the Zacks analyst, Kohl's remains troubled by high SG&A costs and expected tariff impacts on merchandise sourced from China. Markedly, management curtailed its earnings outlook for fiscal 2019.

Higher SG&A Expenses Weigh on Nordstrom's (JWN) Margins

Per the Zacks analyst, Nordstrom is witnessing soft margins due to higher expenses, including store-opening costs and spending on supply chain. SG&A expenses rose 168 bps in first-quarter fiscal 2019.

Costs, Worsening Asset Quality Hurt East West Bancorp (EWBC)

Per the Zacks analyst, elevated expenses, mainly due to technology upgrades and hiring, will hurt East West Bancorp's profitability to an extent. Deteriorating asset quality is a near-term concern.

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The TJX Companies, Inc. (TJX) : Free Stock Analysis Report
NetApp, Inc. (NTAP) : Free Stock Analysis Report
Medtronic PLC (MDT) : Free Stock Analysis Report
Incyte Corporation (INCY) : Free Stock Analysis Report
Consolidated Edison Inc (ED) : Free Stock Analysis Report
Deere & Company (DE) : Free Stock Analysis Report
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