Top Analyst Reports for Netflix, AstraZeneca & Union Pacific

Monday, July 20, 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 Netflix (NFLX), AstraZeneca (AZN) and Union Pacific (UNP). 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 >>>

Netflix shares have outperformed the Zacks Broadcast Radio and Television industry over the past year (+58.7% vs. +15.2%), though the stock has lost some ground following last week's quarterly release. The Zacks analyst believes that rising competition from Apple TV+, Amazon prime video, HBO Max, Disney+, TikTok is a major headwind. Netflix’s leveraged balance sheet and higher streaming obligation is a concern. 

However, the company is dominating the streaming space, courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content and an expanding international footprint.

However, Netflix expects subscriber growth to decline in the second half of 2020 due to less demand. Moreover, absence of new seasons of popular shows like Money Heist and Stranger Things is expected to affect subscriber growth.

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

Shares of AstraZeneca have gained +20.3% over the past six months against the Zacks Large Cap Pharmaceuticals industry’s rise of +0.7%. The Zacks analyst believes that AstraZeneca’s products like Nexium, Crestor and Seroquel are facing generic competition, which is hurting sales.

The diabetes franchise also faces stiff competition while pricing pressure is hurting sales in the respiratory unit. Also, the coronavirus outbreak may hurt its profits in 2020. Nonetheless, AstraZeneca’s newer drugs, mainly cancer medicines Lynparza, Tagrisso and Imfinzi, should keep driving revenues in 2020.

Its pipeline is strong with abundance of pipeline catalysts lined up for 2020. Several launches are underway across each of the therapeutic areas. Cost-cutting efforts should drive earnings. The company has a mixed record of earnings surprises in the recent quarters. Estimates have gone up ahead of Q2 earnings release.

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

Union Pacific shares have gained +25.5% over the past three months against the Zacks Rail industry’s rise of +24.8%. The Zacks analyst expects Union Pacific's second-quarter 2020 results, scheduled to be released on Jul 23, to be affected severely by low volumes in these coronavirus-ravaged times.

Due to coronavirus-induced supply-chain disruptions and closure of the U.S. automotive plants, overall volumes are likely to have declined in the to-be-reported quarter. In fact, second-quarter volumes are expected to plunge nearly 20%. Weakness in the Bulk, Premium and Industrial units is likely to have weighed on the overall volume picture as well.

However, efforts to control costs, courtesy of the precision scheduled railroading operating plan, are a positive, particularly, in the light of revenue concerns. The company's ability to generate free cash flow is also a boon. Further, the uptick in e-commerce demand during the pandemic is encouraging.

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

Other noteworthy reports we are featuring today include NextEra Energy (NEE), Sanofi (SNY) and Estee Lauder (EL).

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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

Robust Content Aids Netflix (NFLX) Amid Stiff Competition

Cancer Drugs to Drive AstraZeneca's (AZN) Sales in 2020

Cost Curbs Help Union Pacific (UNP), Volume Dip Dents Growth

Featured Reports

Investment in Infrastructure and Renewable Aid NextEra (NEE)

Per the Zacks analyst, NextEra's ongoing and planned investment to produce clean electricity and strengthen its infrastructure will boost profitability.

Sanofi (SNY) Specialty Care & Vaccines Unit Support Sales

The Zacks analyst says that Sanofi's Specialty Care unit is on a strong footing with regular label expansion of Dupixent.

Cost Savings to Aid Estee Lauder (EL), Store Closures a Woe

Per the Zacks analyst, Estee Lauder is set to gain from cost saving plans amid COVID-19 outbreak.

Pre-Salt Reserves Boosts Petrobras (PBR), Debt Pile Hurts

Petrobras' stakes in Brazil's attractive pre-salt oil reservoirs should boost its earnings outlook. However, the Zacks analyst is concerned over the company's huge debt load of $73.1 billion.

Portfolio Growth Aids SBA Communications (SBAC) Amid 5G Hype

Per the Zacks Analyst, SBA Communications will likely see portfolio growth on rising demand and adoption of data-driven mobile devices and applications, though customer concentration is a risk.

Manulife (MFC) is Poised to Grow on Solid Asia Business

Per the Zacks analyst, Manulife Financial is set to grow on solid Asia business, expanding Wealth and Asset Management business and cost control.

Life Science Assets to Drive Growth for Alexandria (ARE)

Per the Zacks Analyst, strong fundamentals in the life-science industry are driving demand for Alexandria's lab office assets. However, given its global footprint, currency fluctuation remains a woe.

New Upgrades

Innovations, Solid Shipments Boost Enphase Energy (ENPH)

Per the Zacks analyst, Enphase constantly innovates versions of its microinverters, to capture larger share of the solar market. Solid shipments of products tend to bolster its revenue growth.

Helen of Troy (HELE) Gains From Solid Health & Home Unit

Per the Zacks analyst, higher demand in the Health & Home unit amid coronavirus is driving growth. Notably, sales in the segment grew 29.1% year over year in fiscal first-quarter.

Rising Free Cash Flow & Acquisitions to Aid Winnebago (WGO)

Per the Zacks Analyst, Winnebago is riding on the strength of its acquisitions, including Newmar and Grand Design. Its rising free cash flow and strengthening balance sheet will boost its prospects.

New Downgrades

Trulicity, Taltz to Drive Lilly's (LLY) Sales in 2020

The Zacks analyst believes that despite coronavirus pandemic, Lilly's sales in 2020 will be driven by higher demand for drugs like Trulicity, Taltz, and others and potential drug launches.

Solid Gaming Portfolio Aids Activision's (ATVI) Prospects

Per the Zacks analyst, Activision's top line is expected to benefit from a burgeoning user base on the back of a sturdy gaming portfolio and e-sports endeavors.

Coronavirus-Induced Demand Woes Plague Badger Meter (BMI)

Per the Zacks analyst, weak demand of industrial products and high R&D costs along with supply chain disruptions plague Badger Meter's financial performance amid COVID-19 pandemonium.

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 report
Union Pacific Corporation (UNP): Free Stock Analysis Report
Sanofi (SNY): Free Stock Analysis Report
Netflix, Inc. (NFLX): Free Stock Analysis Report
NextEra Energy, Inc. (NEE): Free Stock Analysis Report
The Estee Lauder Companies Inc. (EL): Free Stock Analysis Report
AstraZeneca PLC (AZN): 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.


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