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Top Stock Reports for Microsoft, Home Depot & AbbVie

Mark Vickery

Friday, September 6, 2019

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features updated research reports on 16 major stocks, including Microsoft (MSFT), Home Depot (HD) and AbbVie (ABBV). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Microsoft’s shares have gained +29.4% in the past year, outperforming the S&P 500’s’ gain of +2.4% during the same period. Microsoft is benefiting from growing user base of its different applications like Office 365 commercial, Dynamics, Outlook mobile and Teams. Moreover, Azure’s expanding customer base is a key catalyst.

Microsoft’s gaming segment is performing well, primarily driven by a combination of Xbox Live, Game Pass subscriptions and Mixer, which are driving user engagement. Further, acquisitions like PlayFab and GitHub expand Microsoft’s total addressable market (TAM) and penetration. Additionally, expanding partner base is notable.

However, projections of a moderating growth rate in commercial cloud gross margin, and OEM Pro and Windows commercial businesses is a headwind. Moreover, stiff competition from the like of Google, Apple, Sony and Nintendo remains a headwind.

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

Shares of Home Depot have gained +32.8% year to date, outperforming the Zacks Retail Building Products industry’s +28.3% increase. The Zacks analyst thinks that this is attributable to a positive earnings surprise trend recorded for more than five years, which continued in second-quarter fiscal 2019.

Earnings benefited from progress on strategic investments as well as a favorable U.S. consumer backdrop and a steady housing market. Meanwhile, the company’s top line lagged estimates but improved year over year on robust comps performance. Its efforts to provide an interconnected shopping experience to customers, with innovative products and improved productivity, position it for growth.

Despite these gains, lumber price deflation remained a drag on the company’s sales and comps in the fiscal second quarter. Further, it slashed its sales and comps view for fiscal 2019 on lumber price deflation and fears of potential impacts of the newly enacted tariffs.

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

AbbVie’s shares have lost -27.3% year to date, versus the Zacks Large-Cap Pharmaceuticals industry's decline of -0.6%. AbbVie beat estimates for earnings and sales in the second quarter and raised its earnings guidance for the second time this year.

The Zacks analyst thinks AbbVie’s key drug, Humira, is performing well based on strong demand trends despite new competition. Imbruvica has multibillion dollar potential. AbbVie has been successful in expanding approvals for its cancer drugs, Imbruvica and Venclexta.

Moreover, it has an impressive late-stage pipeline, comprising several products with multibillion-dollar potential expected to be launched in the near term. The acquisition of Allergan, if successful, should diversify AbbVie’s revenue base and accelerate its non-Humira business. Sales erosion due to direct biosimilar competition to Humira in international markets is a big headwind in 2019.

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

Other noteworthy reports we are featuring today include Palo Alto Networks (PANW), Disney (DIS) and Host Hotels (HST).

It’s Illegal in 42 States, But Investors Will Make Billions Legally

In addition to the companies you read about above, today you get details on the newly-legalized industry that’s tapping into a “habit” that Americans spend an estimated $150 billion on every year.

That’s twice as much as they spend on marijuana, legally or otherwise.

Zacks special report revealing how investors can profit from this new opportunity. As more states legalize this activity, the industry could expand by as much as 15X. Zacks’ has just released a Special Report revealing 5 top stocks to watch in this space.

See these 5 “sin stocks” now>>

Note: Our Director of Research 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

Adoption of Cloud & Office 365 Strength Aids Microsoft (MSFT)

Focus on Pro Customers to Aid Home Depot's (HD) Top Line

International Sales Erosion of Humira Weighs on AbbVie (ABBV)

Featured Reports

Dycom (DY) Banks on Telecom Business, Lower Backlog Hurts

Per the Zacks analyst, Dycom is poised to benefit from strong telecom business.

Finisar (FNSR) Rides on Solid Order Trends & Growth Traction

Per the Zacks analyst, Finisar is expanding its optical subsystems portfolio through R&D efforts, while addressing high demand for products for 5G wireless transition and ROADMs for easy scalability.

Portfolio-Refining Aid Host Hotels (HST), Supply Woes Linger

Per the Zacks analyst, strategic repositioning efforts will likely improve Host Hotels' portfolio quality.

Upper Extremities Arm Aids Wright Medical (WMGI), View Down

Wright Medical has been gaining from solid prospects of its core Upper Extremities segment. The Zacks analyst is however apprehensive about a slashed view for 2019.

Palo Alto Networks (PANW) Rides on Partnerships & Buyouts

Per the Zacks analyst, Palo Alto's partnerships with the likes of VMware, and acquisitions like that of Demisto, PureSec & TwistLock will steadily widen its portfolio and global reach.

Buyouts & New Developments Aid Iron Mountain's (IRM) Growth

The Zacks analyst appreciates Iron Mountain's efforts to expand in targeted markets through lucrative acquisitions and efforts to improve its service platform via new developments.

Omni-Channel to Drive Michaels' (MIK) Sales, Tariffs Hurt

Per the Zacks analyst, Michaels' focus on integrating e-commerce and in-store operations to enhance the omni-channel experience bode well.

New Upgrades

Solid Backlog, Communications Business Aid MasTec (MTZ)

Per the Zacks analyst, MasTec is poised to gain from solid backlog and prospects across communications, transmission, and power generation segments.

International Sales Erosion of Humira Weighs on AbbVie (ABBV)

The Zacks analyst believes that while U.S. Humira and hematological oncology franchise growth are driving sales in 2019, the loss of international Humira revenues to biosimilars is a big headwind.

Strategic Moves & High Loan Balances Aid Huntington (HBAN)

Per the Zacks analyst, Huntington's strategic initiatives, including expansion moves should bolster revenue growth. Further, continued rise in deposits & loans are a favorable factor.

New Downgrades

High Costs & Weather Woes to Hurt Delta's (DAL) Profits

The Zacks analyst is worried about high non-fuel costs limiting Delta's bottom-line growth. Multiple flight cancellations due to Hurricane Dorian are also likely to hurt profitability.

Disney (DIS) Hurt By Rising Investments on ESPN+ & Disney+

Per the Zacks analyst, Disney's ongoing investments on ESPN+ and Disney+ platforms and higher programming and production costs hurts profitability.

Escalating Contract Drilling Expenses Hurt Noble (NE)

Escalating contract drilling expenses are affecting Noble's bottom line. The company's leveraged balance sheet is also a concern, emphasizes the Zacks analyst.

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Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Host Hotels & Resorts, Inc. (HST) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
The Walt Disney Company (DIS) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
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