Monday, August 31, 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 salesforce.com (CRM), Merck Co. (MRK) and AT&T (T). 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 >>>
Salesforce shares have outperformed the Zacks Computer Software industry in the year-to-date period (+65.4% vs. +40.1%) on the back of a robust demand environment as customers undergo a major digital transformation. The rapid adoption of its cloud-based solutions is driving demand for its products. The company's addition to the Dow Jones Industrial Average represents another source of spotlight for this stock.
salesforce’s sustained focus on introducing more aligned products as per customer needs is driving its top-line. Continued deal wins in the international market is another growth driver. Furthermore, the recent acquisition of Tableau positions the company to be a leader in business analytics for actionable results in everything from operations to HR.
However, stiff competition from Oracle and Microsoft is a concern. Besides, unfavorable currency fluctuations along with increasing investments in international expansions and data centers are an overhang on near-term profitability.
(You can read the full research report on salesforce here >>>)
Shares of Merck have gained +5.2% over the past six months against the Zacks Large Cap Pharmaceuticals industry’s rise of +7.2%. The Zacks analyst believes that Merck’s products like Keytruda, Lynparza and Bridion are driving sales.
Animal health and vaccine products remain core growth drivers. The potential separation into two companies makes strategic sense as the remaining Merck should be able to achieve higher profits than the combined company.
Merck experienced less-severe-than-anticipated COVID-19 impact on second-quarter results and expects trends to improve in the second half. However, generic competition for several drugs and rising competitive pressure, mainly on the diabetes franchise, will continue to be overhangs on the top line.
(You can read the full research report on Merck here >>>)
AT&T shares have lost -3.3% over the past three months against the Zacks Wireless National industry’s rise of +10.9%. The Zacks analyst believes that AT&T is well placed to benefit from the streaming services of its newly launched HBO Max. The company is committed to a three-year financial framework with sustained investments and debt-reduction efforts.
AT&T intends to deploy a standards-based, nationwide mobile 5G network to spur growth. The company expects to gain a competitive edge through edge computing services that offer the flexibility to better manage data traffic.
However, AT&T is witnessing a steady decline in linear TV subscribers, legacy services and wireline division. Continued cord-cutting remains a perennial challenge as consumers increasingly cancel pay TV packages for cheaper streaming options. As it tries to woo customers with discounts, freebies and cash credits, margins tend to fall. Spectrum crunch in a saturated wireless market is another operational headwind.
(You can read the full research report on AT&T here >>>)
Other noteworthy reports we are featuring today include NIKE (NKE), Honeywell International (HON) and GlaxoSmithKline (GSK).
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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
Digital Transformation and Acquisitions Aid salesforce (CRM)
Keytruda & Other Key Drugs Drive Merck's (MRK) Sales
AT&T (T) Rides on HBO Max, 5G Deployment to Spur Growth
Featured Reports
NIKE (NKE) Digital Business Cushions Top Line Amid Pandemic
Per the Zacks analyst, NIKE's digital ecosystem that includes its website as well as commercial and activity apps cushioned the soft sales due to store closures in Q4.
Intelligrated Unit Drives Honeywell (HON), Weak Demand Hurts
Per the Zacks analyst, strength in Honeywell's Intelligrated and warehouse automation business units will lend momentum to the company.
Glaxo's (GSK) Pipeline Growing Amid Rising Competition
In 2020, Glaxo expects five potential approvals in oncology, HIV, and respiratory areas. However, competitive pressure on its HIV and respiratory drugs is rising, per the Zacks analyst.
Digital Moves Aid Fidelity (FIS), Intense Competition Hurts
Per the Zacks analyst, Fidelity National is well positioned to benefit from investments in mobile banking and innovative products.
Core MedSurg Unit Aids Stryker (SYK), Pricing Pressure Ails
Per the Zacks analyst, Stryker continues to gain from solid prospects of its core MedSurg arm.
Strategic Buyouts Aid Moody's (MCO), Stiff Competition Ails
Per the Zacks analyst, strategic acquisitions and a diverse revenue base are likely to support Moody's financials. However, stiff competition and mounting expenses remain major near-term concerns.
Marketplace & Managed Payments Strength Benefits eBay (EBAY)
Per the Zacks analyst, solid Marketplace growth is aiding eBay's gross merchandise volume. Further, strengthening managed payments offerings are driving customer momentum.
New Upgrades
Intuit (INTU) Rides on Product Refresh, Higher Subscriptions
Per the Zacks analyst, Intuit is benefiting from frequent product refreshes, which help it to gain customers. Moreover, an increase in subscriptions is driving stable revenue growth for the company.
Solid Product Offerings, Buyouts to Benefit Cimpress (CMPR)
Per the Zacks analyst, strength in Cimpress' home decor unit, solid product offerings and the BuildASign buyout will lend momentum to it. Its investment in technology & production capacity bodes well.
Customer Demand Drive Hibbett (HIBB) Comps, Q3 Looks Good
Per the Zacks analyst, Hibbett's comps benefit from solid traffic in stores and website driven by pent-up customer demand. For the fiscal third quarter, top-line momentum is likely to continue.
New Downgrades
Weak Revenue Growth, High Costs Hurt HSBC Holdings (HSBC)
Per the Zacks analyst, HSBC's investments in China and the U.K. are likely to result in higher costs. Also, muted revenue growth and coronavirus-induced slowdown are the other key near-term concerns.
Pacira's (PCRX) High Reliance on Exparel for Growth is a Woe
Per the Zacks analyst, Pacira remains heavily dependent on Exparel for growth, which accounts for majority of its revenues.
Dependence on Third Party Assets ails CNX Resources (CNX)
Per the Zacks analyst CNX Resources' business depends on gathering, processing and transportation facilities owned by others. So, any failure by third party will lower sales and impact earnings.
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ATT Inc. (T): Free Stock Analysis Report
NIKE, Inc. (NKE): Free Stock Analysis Report
Merck Co., Inc. (MRK): Free Stock Analysis Report
Honeywell International Inc. (HON): Free Stock Analysis Report
GlaxoSmithKline plc (GSK): Free Stock Analysis Report
salesforce.com, inc. (CRM): 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.
