TuesdayJune 26, 2018
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), Amgen (AMGN) and Abbott (ABT). 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 >>>
Buy-ranked Facebook 's shares have outperformed the S&P 500 index in the last year, gaining +27.8% vs. +11.8%. The Zacks analyst thinks Facebook is benefitting from robust growth in advertising and user base.
Facebook's user base of 2.2 billion coupled with Instagram's 1 billion users provides a huge canvas for advertisers, which, in turn, is driving the top line of the company. Rising mobile conversions on the platform is boosting mobile ad growth. Growing popularity of Stories across all major platforms, with Instagram taking center stage, is a tailwind.
Apart from mobile and video, the monetization opportunities of Messenger, WhatsApp and Oculus and a huge user base are expected to drive growth going ahead. Facebook has a strong balance sheet and generates significant cash flow, which makes it an attractive stock for investors.
(You can read the full research report on Facebook here >>> ).
Shares of Buy-ranked Amgen have gained +6.6% year to date, outperforming the Zacks Biomedical and Genetics industry, which has declined -7.2% over the same period. Amgen's newer drugs - Prolia, Xgeva, Blincyto, Vectibix, Kyprolis - are performing well.
Amgen is also progressing with its pipeline and the recent approval of migraine candidate, Aimovig was a huge boost. Amgen's restructuring plan is making it leaner and more cost efficient . Lower taxes and share buybacks should provide some bottom-line support in 2018. However, Amgen has some challenges in store, given slowdown in sales of mature drugs like Enbrel, Aranesp and Neulasta, which are facing an array of branded and generic competitors.
Volume growth of new drugs may not be enough to offset lost sales due to the decline in mature brands. While Neupogen is already facing U.S. biosimilar competition, Neulasta, Epogen and Sensipar could start facing the same this year. Meanwhile, uptake of key new drug, Repatha has been slow due to payer restrictions.
(You can read the full research report on Amgen here >>> ).
Abbott 's shares have gained +24.9% over the last year, outperforming the Zacks Medical Products industry, which has gained +10.9% over the same period. The Zacks analyst likes the strong and consistent performance by the company's EPD and Medical Devices segments.
Also, solid contributions from Diagnostics and Nutrition business are encouraging. The company's receipt of FDA approval for XIENCE Sierra coronary stent system will help it to revive the dull Vascular business. Within Structural Heart, strong uptake of MitraClip therapy post the national reimbursement approval in Japan is a positive. Abbott's Alere buyout is another positive.
Synergies from this consolidation in the form of revenues from Rapid Diagnostics have been driving the company's growth. Meanwhile, the company's emerging market performance has been extremely promising on several strategic developments. On the flip side, sluggish Vascular business in the United States continues to dent growth.
(You can read the full research report on Abbott here >>> ).
Other noteworthy reports we are featuring today include Verizon (VZ), Coca-Cola (KO) and 3M (MMM).
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Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expertofaggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trendsand Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Facebook (FB) Gains From Growing User, Advertising Base
Amgen's (AMGN) New Drugs Perform Well, Plans Cost Reduction
Abbott's (ABT) Afinion 2 Boosts Diabetics, Soft Vascular Ails
Passenger Revenues Aid United Continental (UAL), Costs High
The Zacks analyst likes the growth in passenger revenues at United Continental due to strong demand for air travel High fuel costs are, however, limiting bottom-line growth.
Brown-Forman's (BF.B) Solid Underlying Sales to Boost Growth
Per the Zacks analyst, Brown-Forman delivered seventh straight underlying sales growth in fourth-quarter due to strength in focus categories and brand portfolio.
Kroger's (KR) Customer 1st, Restock Program to Aid Top Line
Per the Zacks analyst, Kroger's customer 1st strategy, restock program and digital endeavors will boost sales.
Acquisitions, Strong Balance Sheet Aid Total System (TSS)
Per the Zacks analyst, acquisitions of NetSpend, TransFirst, Cayan and others have aided inorganic growth. Its strong free cash flow and deleveraging progress provides immense investment opportunity.
Focus on Trading Revenues, Higher Rates Aid Schwab (SCHW)
Per the Zacks analyst, Schwab's efforts to improve trading revenues by lowering online equity and ETF trade commissions and reducing fees, along with higher rates are likely to aid profitability.
Carnival (CCL) Rides on Higher Revenue Yield, High Cost Ails
The covering analyst is encouraged by Carnival's effort to enhance revenue yield from high ticket prices amid increased demand.
Dave & Buster's (PLAY) Rides on Store Openings, High Cost Ails
Per the Zacks analyst, Dave & Buster's continued pursuit to drive revenues through new store growth in both new and existing markets bodes well.
Vertex (VRTX) Making Strong progress on Cystic Fibrosis Drugs
Per the Zacks analyst, Vertex's Cystic Fibrosis pipeline is quite strong with a broad portfolio of next-generation CF correctors which could bring in multi-billion dollar sales.
Red Hat (RHT) Rides on Solid Product Portfolio, Partnerships
Per the Zacks analyst, Red Hat is gaining from strong demand for Hybrid cloud & other emerging technologies like OpenShift & Ansible. Solid partner base that includes Microsoft & IBM is a tailwind.
PACCAR (PCAR) to Gain From Improved Class 8 Truck Demand
Per the Zacks analyst, a robust economy and strong freight demand will drive PACCAR's retail sales of Class 8 truck in the United States and Canada, thus, driving the company revenues.
Higher Costs & Other Hurdles to Hurt Coca-Cola's (KO) Margins
Per Zacks analyst, change in accounting, structural headwinds and cost pressures will hurt margins of Coca-Cola's North America segment. Sluggish results due to CSD category headwinds are worrying.
Saturated Wireless Market & Wireline Woes Aid Verizon (VZ)
Per the Zacks analyst, losses in wireline access lines, a saturated wireless market, higher marketing costs of promotional plans and competitive video market remain major impediments for Verizon.
3M (MMM) Marred by Input Price Inflation & High Pension Cost
Per the Zacks analyst, price inflation in major inputs, high retirement benefit cost and escalating freight charges might continue to hurt 3M's profitability in the near term.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportVerizon Communications Inc. (VZ): Free Stock Analysis Report3M Company (MMM): Free Stock Analysis ReportCoca-Cola Company (The) (KO): Free Stock Analysis ReportFacebook, Inc. (FB): Free Stock Analysis ReportAmgen Inc. (AMGN): Free Stock Analysis ReportAbbott Laboratories (ABT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research