Wednesday, April 15, 2020
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 Microsoft (MSFT), Walmart (WMT) and Amgen (AMGN). 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 >>>
Microsoft’s shares have outperformed the S&P 500 over the past six months (+23.7% vs. -4.9%). The Zacks analyst believes that 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. Markedly, the ongoing expansion in Microsoft Teams’ subscriber base is strengthening the company’s competitive position in the enterprise communication market against Slack and Zoom. Furthermore, the company is well poised to widen the total addressable market through acquisitions of GitHub and PlayFab.
However, management doesn’t expect to meet its previous third-quarter fiscal 2020 projection for More Personal Computing segment revenues due to the coronavirus outbreak in China. This, in turn, raises investors’ concerns, at least in the near term.
(You can read the full research report on Microsoft here >>>)
Shares of Walmart have gained 25.3% over the past year against the Zacks Supermarkets industry’s rise of 23.1%. The Zacks analyst believes that the stock has been especially gaining from increased traffic stemming from rising demand for essential items amid coronavirus.
COVID-19 and the resultant social distancing has spiked up the demand for toilet paper, masks, gloves, packaged water, groceries and related staples. This has led to increased store traffic, to handle which the company also announced additional hiring. Walmart is also taking actions to support employees’ well-being and safety.
To this end, it announced special cash bonuses, and has altered shopping methods to aid social distancing. The company has also been gaining from its e-commerce business, especially grocery delivery. However, the company’s gross margin has been strained for a while due to compelling pricing and growing e-commerce mix.
(You can read the full research report on Walmart here >>>)
Amgen’s shares have lost 8% over the past three months against the Zacks Biomedical and Genetics industry’s fall of 4.2%. The Zacks analyst believes that while Amgen’s growth products like Prolia, Evenity, Repatha, Aimovig, Otezla and biosimilars will drive sales in 2020, increasing competition for its legacy products will continue to hurt the same.
Amgen boasts a strong biosimilars portfolio. It is also progressing with its pipeline while regularly pursuing “external opportunities” such as the acquisition of Otezla and the recently acquired stake in China's BeiGene. Amgen also expects several important clinical data readouts from its innovative pipeline in 2020.
However, pricing and competitive pressure are concerns. Estimates have gone down ahead of Q1 results due to uncertainty about the impact of the coronavirus pandemic on results. Amgen has a positive record of earnings surprise in recent quarters.
(You can read the full research report on Amgen here >>>)
Other noteworthy reports we are featuring today include Adobe (ADBE), salesforce.com (CRM) and Mondelez International (MDLZ).
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>
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
Adoption of Cloud & Office 365 Strength Aid Microsoft (MSFT)
Walmart (WMT) Sales Likely to Gain on Coronavirus-Led Demand
Amgen (AMGN) Counts on Growth Drugs Amid Biosimilar Woes
Adobe (ADBE) Rides on Growing Adoption of Cloud Applications
Per the Zacks analyst, solid momentum across Creative Cloud, Document Cloud and Experience Cloud services is aiding Adobe's cloud business which generates significant amount of revenues.
Digital Transformation and Acquisitions Aid salesforce (CRM)
Per the Zacks analyst, salesforce is benefiting from ongoing digital transformations and adoption of its cloud services. Moreover, strategic acquisitions like Tableau and ClickSoftware are a positive.
Mondelez (MDLZ) Organic Sales Gain on Solid Pricing Actions
Per the Zacks analyst, Mondelez's organic sales have been gaining from its strategic pricing initiatives.
Enbridge (ENB) to Grow on PennEast Pipeline Gas Project
The Zacks analyst believes that Enbridge's 118-mile natural gas PennEast Pipeline will bring incremental fee-based revenues. However, its high debt burden is concerning.
ConocoPhillips (COP) Banks on Oil-Rich Eagle Ford Acreage
The Zacks analyst believes that there are solid opportunities for ConocoPhillips left in Eagle Ford where it owns about 3,400 undrilled locations. However, rising production costs will hurt profit.
Growth Projects Aid Agnico Eagle (AEM) Amid Cost Woes
While the company faces headwind from higher mining costs, it will gain from progress in its key growth projects and its investment in assets to expand production, per the Zacks analyst.
Cboe Global (CBOE) Rides on Acquisitions, Competition Stiff
Per the Zacks analyst, the buyouts of Bats Global and Silexx Financial Systems have boosted and diversified Cboe Global's product portfolio.
Clorox (CLX) Banks Upon Sturdy Demand & IGNITE Strategy
Per the Zacks analyst, Clorox is gaining from solid demand in disinfectants due to the coronavirus outbreak. Also, its IGNITE strategy which focuses on product innovation is likely to boost growth.
Fortive (FTV) Rides on Buyout Benefits, Product Pipelines
Per the Zacks analyst, positive contributions from acquisitions and robust product pipelines are aiding growth in Fortive's Professional Instrumentation and Industrial Technologies segments.
Product Innovation Aids Enphase (ENPH), High Debt Hurts
Per the Zacks Analyst, Enphase Energy constantly innovates versions of its family of microinverters, to capture the expanding solar market shares. However, high debt levels may hurt growth trajectory.
Coronavirus Pandemic Hurts Hilton (HLT) RevPAR & Occupancy
Per the Zacks analyst, the deadly virus is likely to hurt Hilton performance in first-quarter 2020. The company expects a 100-150 bps drag on system-wide RevPAR growth in first-quarter due to COVID-19
Low Investments, Leasing Activity to Hurt Jones Lang (JLL)
Jones Lang LaSalle's performance is likely to be affected by moderation in investment volumes and leasing activity amid choppy global real estate market due to the coronavirus pandemic.
Lower OSB Pricing & Higher Costs Hurt Louisiana-Pacific (LPX)
Per the Zacks analyst, lower Oriented Strand Board (OSB) pricing across North American operations, weak macro environment, rising material costs are pressing concerns for Louisiana-Pacific.
Walmart Inc. (WMT) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report
salesforce.com, inc. (CRM) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
Adobe Systems Incorporated (ADBE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research