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Top Analyst Reports for Merck, Abbott & Lockheed Martin

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Friday, December 28, 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 Merck (MRK), Abbott (ABT) and Lockheed Martin (LMT). 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 Merck 's shares have gained +33.9% year to date, significantly outperforming the Zacks Large Cap Pharmaceuticals industry, which has gained +2.8% over the same period. The Zacks analyst emphasizes that Merck's new products like Keytruda, Lynparza, and Bridion are contributing meaningfully to the top line.

Keytruda sales are gaining momentum with approval for additional indications, especially in the first-line lung cancer setting as it is the only anti-PD-1 approved in this setting. Animal health and vaccine products are also performing strongly and remain core growth drivers for Merck. Meanwhile, Merck will continue to focus on cost-cutting initiatives to drive the bottom line.

However, generic competition for several drugs and pricing pressure will continue to be overhangs on the top line. Rising competitive pressure on the diabetes franchise and on products like Isentress (HIV), Zepatier (HCV) and Zostavax (vaccine) remains.

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

Shares of Abbott have lost -4.7% over the past three months, outperforming the Zacks Medical Products industry, which has declined -14.2% over the same period. Increasing currency headwinds to some extent dented the company's strong international performance in the last reported quarter. Meanwhile, emerging market performance has been promising.

The Zacks analyst is optimistic about the strong and consistent performance by the company's EPD and Medical Devices segments. The company has been hogging the limelight within Diabetic Care on growth with FreeStyle Libre. Within Structural Heart, worldwide strong uptake of MitraClip improves further following the FDA approval of its upgraded version.

This apart, synergies from Alere consolidation in the form of revenues from Rapid Diagnostics have been driving growth. On the flip side, sluggish Vascular arm continues to dent growth.

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

Buy-ranked Lockheed Martin 's shares have lost -19.1% over the past one year, underperforming the Zacks Aerospace Defense sector, which has declined -9.1% over the same period. The Zacks analyst emphasizes that Lockheed Martin, being the largest defense contractor in the world, enjoys a strong demand for its high-end military equipment in domestic as well as international markets.

Consequently, strong order growth has been a primary growth driver for this company. Lately, the company has been witnessing strong demand for its equipment, ranging from C-130J aircraft in France and Germany to helicopters in Poland to missile defense systems in the Asia-Pacific, Europe, and Middle East regions.

Its backlog climbed to a record $109 billion, in the third quarter. However, it faces intense competition for its broad portfolio of products and services in both domestic and international markets.

(You can read the full research report on Lockheed Martin here >>> ).

Other noteworthy reports we are featuring today include General Dynamics (GD), United Parcel Service (UPS) and Bank of New York Mellon (BK).

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Mark Vickery

Senior Editor

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 Trendsand Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

Today's Must Read

New Drugs Drive Merck's (MRK) Sales as Competition Soars

Abbott's (ABT) EPD Gains in Russia, Alere Synergy Strong

Solid Order Growth, Favorable Budget to Aid Lockheed (LMT)

Featured Reports

Acquisitions Aid General Dynamics (GD) Interest Rates Hurt

Per the Zacks analyst, strategic acquisitions will help the company to maintain steady growth momentum and drive future results. However, rising interest rates are likely to hurt its growth prospects.

Strong Underwriting Margin Aids Travelers (TRV), Cat Loss Ails

Per the Zacks analyst, Travelers is poised to benefit from compelling product portfolio, prudent pricing and strong market position aiding underwriting gains.

Uniform Rental & Facility Services to Drive Cintas (CTAS)

Per the Zacks analyst, strong traction of Cintas' Uniform Rental & Facility Services segment, fueled by increasing penetration levels at existing customers should continue to drive its revenues.

International Expansion to Boost lululemon (LULU)

Expansion in international markets is a key aspect of lululemon's long-term growth strategy. The company has currently identified significant expansion opportunities in Europe and Asia.

Darden (DRI) Rides on Menu Innovation, High Expenses Hurt

The Zacks analyst believes that Darden's focus on menu innovation in all its brands as well as other sales building efforts will continue to boost top line growth.

Cargo Revenues Aid LATAM Airlines (LTM) Amid Capacity Woes

The Zacks analyst appreciates the growth in cargo and passenger revenues at LATAM Airlines.

Acquisition Strategy Aids Cosan (CZZ), Rising Costs Hurt

Per the Zacks analyst, Cosan will gain from its acquisitions and its supply and commercialization strategy.

New Upgrades

Nektar's (NKTR) Oncology Deals, Pipeline Driving Growth

Per the Zacks analyst, Nektar has collaborations with large pharma companies which provide significant amount in fees and a robust pipeline. However, the company relies on partners for revenues.

C.H. Robinson (CHRW) Rides on Dividends & Share Buybacks

The Zacks analyst is impressed by the company's measures to reward shareholders through dividends and share buybacks. Consistent improvement in operating ratio is another positive.

IMAX (IMAX) Benefits From Hit Hollywood and Chinese Titles

Per the Zacks analyst, growing number of blockbuster titles benefit IMAX. Additionally, higher contribution from Greater China bodes well for top-line growth.

New Downgrades

High Operating Expenses, Trade Issues Impede UPS' Growth

The Zacks analyst is concerned about high operating expenses at UPS. High capital expenses are pushing up costs. Trade disputes between China and the United States are also a concern.

High Expenses, Fee Dependence Hamper BNY Mellon (BK) Growth

Per the Zacks analyst, elevated operating expenses, mainly due to investment-related costs, and litigation and restructuring charges along with dependence on fee-based income hurt BNY Mellon's growth.

Interest Rates, Competition Hurts Leidos Holdings (LDOS)

Per the Zacks analyst, Leidos Holdings is susceptible to interest rate risk related to debt issuance. Leidos faces intense competition for its portfolio of products and services.

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

United Parcel Service, Inc. (UPS): Free Stock Analysis Report

Merck & Co., Inc. (MRK): Free Stock Analysis Report

Lockheed Martin Corporation (LMT): Free Stock Analysis Report

General Dynamics Corporation (GD): Free Stock Analysis Report

The Bank of New York Mellon Corporation (BK): Free Stock Analysis Report

Abbott Laboratories (ABT): 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.


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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