Monday, December 14, 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 Facebook (FB), Verizon Communications (VZ) and Sanofi (SNY). 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 >>>
Facebook shares have outperformed the S&P 500 in the year to date period (+33.2% vs. +13.9%). The Zacks analyst believes that Facebook is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its products like Instagram, WhatsApp, Messenger and Facebook Watch is a major growth driver.
However, Facebook expects user-base growth to be flat or slightly down in the United States and Canada in the fourth quarter of 2020, sequentially. The company expects ad-revenue growth on a year-over-year basis to be better than the third quarter’s growth rate, driven by continued strong advertiser demand during the holiday season.
Strong demand for Oculus 2 is expected to boost other revenues. However, changes made by Apple and Google in their mobile operating systems and browser platforms have limited Facebook’s ability to track user-activity trend, which is a headwind.
(You can read the full research report on Facebook here >>>)
Shares of Verizon have lost -1.4% over the past year against the Zacks Wireless National industry’s gain of +2.7%. The Zacks analyst believes that Verizon is well positioned to gain from a disciplined network strategy, including accelerated 5G deployment, despite uncertainties stemming from the ongoing pandemic.
The company has been building its 5G Ultra-Wideband network to enable innovations that will support the evolving customer behavior. It expects to witness solid 5G momentum as it heads into the fourth quarter of 2020 backed by customer-centric business model and diligent execution of operational plans.
However, Verizon is facing significant headwinds within the media business due to weak advertising trends. It operates in an intensely competitive U.S. wireless market that strains margins. Adoption of unlimited data plans has resulted in reduction of wireless service revenues.
(You can read the full research report on Verizon here >>>)
Sanofi shares have lost -5.5% over the past six months against the Zacks Large Cap Pharmaceuticals industry’s rise of +9.1%. The Zacks analyst believes that Sanofi’s Specialty Care unit is on a strong footing, particularly with regular label expansion of Dupixent, which has become the key top-line driver for Sanofi.
Meanwhile, Sanofi’s R&D pipeline is strong and several data read-outs are expected in 2021. Its cost-savings and efficiency initiatives are supporting bottom-line growth. However, headwinds include weak performance of the Diabetes unit, generic competition for many drugs and slower-than-expected uptake of core products like Praluent.
(You can read the full research report on Sanofi here >>>)
Other noteworthy reports we are featuring today include QUALCOMM (QCOM), Altria Group (MO) and ICICI Bank (IBN).
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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
Expanding User Base, Instagram Strength Aid Facebook (FB)
5G Traction & Customer-Centric Approach Aid Verizon (VZ)
Sanofi (SNY) Specialty Care Unit Helps Sales, Pipeline Solid
Featured Reports
Qualcomm (QCOM) Rides on 5G Chips for Resilient Connectivity
Per the Zacks analyst, despite short-term headwinds, Qualcomm is focused on retaining its leadership in the 5G chipset market and mobile connectivity with the launch of low-priced 5G chips for masses.
Operating Prowess Aids Waste Management (WM) Amid High Debt
The Zacks analyst is impressed with Waste Management’s solid operational performance which has helped it strengthen its cash flow position.
Technology, Loans Aid ICICI Bank (IBN), Asset Quality a Woe
Per the Zacks analyst, ICICI Bank’s efforts to digitize operations, and steady loan and deposit growth will aid profitability.
Growing Top Line Aids, High Leverage Ails Centene (CNC)
Per the Zacks analyst, its rising revenues on the back of buyouts, solid Health Insurance Marketplace business, and expansions poise it well for growth.
Zimmer Biomet (ZBH) Gains From Rapid Sequential Sales Rebound
The Zacks analyst is upbeat about Zimmer Biomet’s rapid recovery with sequential improvement in sales. A gradually stabilizing global musculoskeletal market also buoy optimism.
Diamondback (FANG) to Gain from Energen & Ajax Acquisitions
The Zacks analyst believes Diamondback’s twin buys of Energen Corp and Ajax Resources should bolster its Permian hold.
Pricing Benefits Altria (MO), Soft Cigarette Volumes Hurt
Per the Zacks analyst, Altria is likely to gain on solid pricing, which aided adjusted operating companies income in the third quarter.
New Upgrades
Buyouts & Focus on Affordable Homes to Aid D.R. Horton (DHI)
D.R. Horton is well poised for fiscal 2021 given its industry-leading market share, acquisition strategy, solid housing market, and focus on more entry-level affordable homes, per the Zacks analyst.
Solid Repair/Remodel Market to Aid Louisiana-Pacific (LPX)
Per the Zacks analyst, ample liquidity, operational efficiency, cost-containment efforts, and a resilient housing market will help Louisiana-Pacific to drive growth.
Network Strength & Customer Growth Aid U.S. Cellular (USM)
Per the Zacks analyst, U.S. Cellular should continue to gain from its network modernization program, adding capacity and speed while launching 5G services commercially and VoLTE in remaining markets.
New Downgrades
Tenant Failures & Overdue Rents Hit Simon Property (SPG)
Per the Zacks analyst, Simon Property’s performance will likely be marred by the shrinking footfall amid store closures and retailers’ bankruptcy. Pandemic-borne rent collection woes remain.
Pay-TV Subscriber Loss Hurts DISH Network’s (DISH) Prospects
Per the Zacks analyst, DISH Network continues to lose subscribers in both Pay-TV and Sling TV businesses. Further, a debt-ridden balance sheet is a lingering concern.
High Debt Burden and Stiff Competition to Hurt PTC (PTC)
Per the Zacks analyst, PTC’s leveraged balance sheet and integration risks from buyouts are major concerns. Also, stiff competition in the computer-aided design market adds to its woes.
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Verizon Communications Inc. (VZ): Free Stock Analysis Report
Sanofi (SNY): Free Stock Analysis Report
QUALCOMM Incorporated (QCOM): Free Stock Analysis Report
Altria Group, Inc. (MO): Free Stock Analysis Report
ICICI Bank Limited (IBN): Free Stock Analysis Report
Facebook, Inc. (FB): Free Stock Analysis Report
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Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
