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Top Stock Research Reports for Roche, Royal Dutch Shell & Citigroup

Sheraz Mian

Tuesday, January 21, 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 Roche Holding (RHHBY), Royal Dutch Shell (RDS.A) and Citigroup (C). 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 >>>

Roche’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+31.7% vs. +15.1%), primarily reflecting solid sales of new drugs. Strong growth of Ocrevus, Perjeta, Tecentriq and Hemlibra countered biosimilar competition in Europe for Herceptin and MabThera. Particularly, MS drug Ocrevus witnessed strong growth on increased demand.

Roche’s dominant position in the breast cancer space continues to boost performance further. Also, label expansion of Tecentriq into additional indications is a positive. The recent Spark acquisition will boost Roche’s presence in the gene therapy space.

However, most of the legacy drugs are facing competition. Pipeline setbacks and biosimilar competition are concerns as well. Additionally, the persistent delay in the Spark acquisition is disappointing. 

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

Shares of Royal Dutch Shell have lost -9.6% in the past six months against the Zacks Integrated Oil industry's decline of -7.1%, primarily reflecting the tough commodity-price backdrop. These are undoubtedly difficult times for the oil industry, but Shell is doing as good a job as any. It reported better-than-expected September-quarter results and we will likely see similar outperformance as the company reports Q4 results towards the end of this month. 

The Anglo-Dutch company's position as a key supplier of liquefied natural gas should further benefit its long-term cash flow growth on the back of attractive growth opportunities. Moreover, its dividend is safe and secure. However, there are worries over drop in its cash flow excluding working capital while the company’s poor reserve replacement ratio raises concerns about future production.

Moreover, Shell’s $1.7-$2.3 billion impairment charge is expected to increase gearing. Hence, investors are advised to wait for a better entry point.

(You can read the full research report on Royal Dutch Shell here >>>)

Citigroup’sshares have gained +11.8% over the past three months against the Zacks Major Regional Banks industry's rise of +7.4%. The Zacks analyst believes that net interest revenues will likely be supported by loan growth and mix, despite low rates in the days ahead. Also, the company’s steady capital-deployment activities are also commendable.

The company has an impressive earnings surprise history, beating the Zacks Consensus Estimate in all the trailing four quarters. The company’s fourth-quarter 2019 results reflected higher revenues and loans, partly offset by rise in expenses and cost of credit.

Citigroup’s streamlining efforts, along with strategic investments in core business, bode well for the long term. However, pending litigation issues might keep legal expenses elevated. Additionally, decline in equity-market revenues and volatile underwriting business are concerns for the company.

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

Other noteworthy reports we are featuring today include UnitedHealth (UNH), AstraZeneca (AZN) and Costco Wholesale (COST).

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

Sheraz Mian

Director of Research

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

New Drugs Boost Roche (RHHBY) Amid Biosimilar Competition

Royal Dutch Shell (RDS.A) to Gain from Growing LNG Demand

Expense Control Aids Citigroup (C), Low Fee Income A Woe

Featured Reports

Strong Service and Benefit Business Aids UnitedHealth (UNH)

Per the Zacks analyst, the company's UnitedHeathcare and Optum businesses have been putting up a solid performance from past many years that have led to revenue and membership growth.

AstraZeneca (AZN) Rides on Solid Pipeline, Drug Launches

The Zacks analyst likes AstraZeneca's promising late-stage pipeline that includes immuno-oncology candidates.

Decent Comparable Sales Run to Fuel Costco's (COST) Top Line

Per the Zacks analyst, Costco's growth strategies, sturdy comparable sales performance and strong membership trends reinforce its position.

AbbVie (ABBV) Ex-U.S. Humira Sales Erode, New Drugs Impress

AbbVie's key drug, Humira is seeing strong demand in the United States while generics are eroding ex-U.S. sales. The Zacks analyst believes that new drugs Skyrizi and Rinvoq are off to a strong start.

Glaxo's (GSK) Pipeline Growing Amid Generic Woes for Advair

The Zacks analyst likes Glaxo's efforts to boost its pipeline, especially oncology.

Intercontinental (ICE) Banks on Buyouts Amid High Costs

Per the Zacks analyst, Intercontinental Exchange is set to grow on a number of acquisitions and cost synergies.

Eylea, Dupixent Drive Regeneron (REGN) Amid Competition

Per the Zacks analyst, lead drug Eylea and asthma drug Dupixent drive growth for Regeneron. However, it is highly dependent on Eylea for growth and the drug is facing competition.

New Upgrades

GoDaddy (GDDY) Innovative Products Continue to Drive Growth

Per the Zacks analyst, GoDaddy is gaining from growing adoption of its domain products and GoCentral, internation expansion, acquisition and innovation strategy.

Customer Strategy to Augment Nordstrom's (JWN) Top-Line

Per the Zacks analyst, Nordstrom's customer strategy focuses on leveraging brand strength and providing compelling products and services. It also looks to boost its digital and supply-chain networks.

Steady Investments to Boost Murphy Oil's (MUR) Production

Per the Zacks analyst Murphy Oil's solid upstream portfolio and ongoing capital investments will enable it to achieve higher oil production in the long term.

New Downgrades

Weak Demand & High Costs to Hurt Carpenter Technology (CRS)

The Zacks Analyst remains concerned that weak transportation demand owing to trade concerns, global light vehicle markets and higher SG&A expenses will impact Carpenter Technology's results.

Tough RV Market and Commodity Price Woes Ail Winnebago (WGO)

Projected decline in RV shipments in 2020 along with rising input costs are likely to hurt Winnebago's sales and profit in the near term, per the Zacks analyst.

Import Tariffs & Promotional Investments Hurt iRobot (IRBT)

Per a Zacks analyst, iRobot (IRBT) suffers from higher tariffs on import of products from China, including robotic vacuum cleaners manufactured in Beijing. High promotional cost is worrying too.

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UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
Roche Holding AG (RHHBY) : Free Stock Analysis Report
Royal Dutch Shell PLC (RDS.A) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
Citigroup Inc. (C) : Free Stock Analysis Report
AstraZeneca PLC (AZN) : Free Stock Analysis Report
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