Friday, February 7, 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 Alphabet (GOOGL), Roche Holding (RHHBY) and Amgen (AMGN). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Alphabet’s shares have outperformed the Zacks Internet Services industry in the past six months (+21.8% vs. +16.3%). The Zacks analyst believes that Google’s strong focus on innovation of AI techniques and the home automation space should aid business growth in the long term.
Alphabet reported weak fourth-quarter earnings due to declining search advertising growth and lower-than-expected YouTube sales. Also, heavy investment in cloud computing and hardware businesses negatively impacted the results. However, Google’s robust mobile search is a positive.
Notably, it has agreed to acquire Fitbit for roughly $2.1 billion. This deal will likely help the company to accelerate innovation in the wearables category. However, the company’s growing expenses, litigation issues and competition might hurt profitability.
Shares of Roche have gained +28.7% over the past year against the Zacks Large Cap Pharmaceuticals industry’s rise of +13.5%. The Zacks analyst believes that Roche’s dominant position in the breast cancer space continues to boost performance on label expansion of drugs.
Roche’s performance in 2019 was impressive, propelled by solid sales of new drugs. Strong growth of Ocrevus, Perjeta, Tecentriq and Hemlibra countered biosimilar competition for Herceptin, MabThera and Avastin. Particularly, MS drug Ocrevus witnessed strong growth on increased demand.
Also, label expansion of blockbuster immune-oncology drug Tecentriq into additional indications is a positive. The recent Spark acquisition will boost Roche’s presence in the gene therapy space as well. However, most of the legacy drugs are facing biosimilar competition. Additionally, pipeline setbacks are concerns as well.
Amgen’s shares have gained +9.9% over the past three months against the Zacks Biomedical and Genetics industry’s rise of +4.7%. The Zacks analyst believes that while Amgen’s growth products like Prolia, Evenity, Repatha, Aimovig, Otezla and biosimilars will drive sales, increasing competition for its legacy products will continue to hurt the same this year.
Amgen boasts of a strong biosimilars portfolio, which can drive long-term growth. Amgen 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.
Other noteworthy reports we are featuring today include General Electric (GE), Sony (SNE) and Biogen (BIIB).
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Today’s Must Read
Per a Zacks analyst, General Electric (GE) is poised to gain from its portfolio restructuring actions, aiming expansion in Power, Aviation and Renewable Energy segments.
Per the Zacks analyst, significant rise in revenues at Sony Life, coupled with growth in Imaging & Sensing Solutions (I&SS) segment led by sales of image sensors for mobile products, is aiding Sony.
While Biogen’s multiple sclerosis (MS) drug Tecfidera and spinal muscular atrophy (SMA) drug Spinraza are driving sales, competitive pressure is expected to rise in 2020 in both MS and SMA markets.
Per the Zacks analyst, Moody’s is poised for growth given its diverse revenue mix and low-risk product portfolio.
Per the Zacks analyst, Schlumberger’s attractive reservoir and well technologies help it to outperform its peers.
Per the Zacks analyst, the company’s revenues have been increasing from sales growth, rise in premium; its strong capital position enables investment for long term growth.
Per the Zacks analyst Eaton’s presence in 175 countries widens its revenue base but weakness in end market conditions is expected to have an adverse impact on the company’s organic revenue growth.
Per the Zacks analyst, Ralph Lauren’s top line gains from consistent strength in international markets, fueled by constant-currency revenue growth of 5% and 5.4%, respectively, in Europe and Asia.
Per the Zacks analyst, Monolithic is poised to gain from robust product portfolio, high demand for smart in-car connectivity and infotainment systems. Also, design wins for high-end servers bode well.
Per the Zacks analyst Sunoco is expected to generate stable cash flows from its lucrative motor fuel distribution business in the U.S. wholesale market.
Ebbing vehicle sales in the Middle East and China amid global slowdown are likely to hurt Ford’s top line growth. The Zacks analyst is also worried of high costs related to new model launches.
Per the Zacks analyst, planned maintenance activities will weigh on LyondellBasell’s margins in 2020. It also faces headwind from elevated raw material and energy costs.
The Zacks Analyst is worried about the soft pricing across most transportation service lines. Deterioration in operating ratio due to tepid revenues is also concerning.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.