Monday, March 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 Nike (NKE), Eli Lilly (LLY) and NVIDIA (NVDA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Nike 's shares have outperformed the Zacks Shoes and Retail Apparel industry over the last three months (+2.7% vs. +1.6%), driven by strength in international business and the global NIKE Direct business which has been aiding its quarterly performance. Notably, the company delivered top- and bottom-line beat in third-quarter fiscal 2018 which also marked the 23rd straight earnings beat.
Third-quarter results reflected significant progress on the Consumer Direct Offense, positioning it for strong profitable growth in the future. Nike closed the third quarter with expectations of a trend reversal in its North America business in the fourth quarter, backed by the introduction of new innovation platforms and differentiated customer experiences in the marketplace.
Consequently, it provided robust guidance for fourth-quarter fiscal 2018 and initial view for fiscal 2019. However, its higher SG&A expenses are likely to continue hurting results in the fourth quarter.
(You can read the full research report on Nike here >>> ).
Shares of Buy-rated Eli Lilly have underperformed the Zacks Large-Cap Pharmaceuticals industry in the last one year (-11.2% vs. +2.8%). However, the Zacks analyst thinks Lilly's presence across a wide range of therapeutic areas provides support in the face of generic competition. Lilly's new products like Trulicity, Taltz, Basaglar, Cyramza, Jardiance and Lartruvo have been driving revenues and the trend is expected to continue in 2018.
Lilly expects to launch 20 new products between 2014 and 2023, including at least two new indications/line extensions on an average every year. The decision to sell or spin-off the Animal Health segment, which has underperformed in 2017, is a prudent decision in our view. Also, competitive pressure on Lilly's drugs is expected to rise this year.
Meanwhile, challenges remain for the company in the form of loss of patent exclusivity for products like Cialis and the impact of generic competition for Strattera, Effient and Axiron. U.S. pricing access pressure will also remain a headwind in 2018.
Strong Buy-rated NVIDIA 's shares have surged in the last year, gaining in excess of +115.2% versus the Zacks General Semiconductor industry's +53.8% gain, thanks to the company's positive record of earnings surprises in the recent quarters. The Zacks analyst thinks NVIDIA's sustained efforts toward attaining robust position in several emerging industries such as Artificial Intelligence (AI), deep learning and driverless cars industry have improved its growth prospects.
NVIDIA's innovative product pipeline and strength in gaming and high-end notebook GPUs remain the positives. The company's focus on GRID platforms can increase GPU adoption in data centers, giving it an advantage against its competitors.
(You can read the full research report on NVIDIA here >>> ).
Other noteworthy reports we are featuring today include Baxter (BAX), L Brands (LB) and Alleghany (Y).
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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
Per the Zacks analyst, Catalyst's efforts to develop Firdapse appear encouraging. But the company's dependence on Firdapse for growth remains a matter of concern.
Per the Zacks analyst, Intrexon's expanding portfolio of technologies has enabled the company to develop a robust pipeline. However, stiff competition adds to its woes.
The Zacks analyst believes Natural Resource is gaining from improving coal prices, which is boosting its coal royalty revenues.
Per the Zacks analyst, to reduce its exposure to carbon emissions, AES Corp. is rapidly expanding its renewable generation portfolio.
The Zacks analyst believes that $290-million backlog of subsea equipment will help Dril-Quip combat declining free cashflow.
Per the Zacks analyst, improving premiums across insurance and reinsurance segments, will continue to boost Alleghany's premium revenues, thereby resulting in the company's overall growth.
Per the Zacks analyst, Allegion's aggressive acquisition strategy along with a focus on bringing in innovative products is expected to boost profitability.
The Zacks analyst thinks that higher sales, lower corporate tax, lesser interest costs & share buybacks will boost Conagra's near-term earnings. It has also lifted fiscal 2018 earnings view.
The Zacks analyst believes that China Life's top line has grown on the back of its investment income which is a result of stable growth across the company's investment portfolio.
The Zacks analyst is bullish on Baxter's launch of 3-in-1 oXIRIS set for continuous renal replacement therapy (CRRT). This adds to its multi-organ therapy offering, utilizing the Prismaflex system.
Per the Zacks analyst, L Brands' deteriorating margins and soft fiscal 2018 view are concerns. Management expects gross margin to decline in the first quarter due to a fall in merchandise margin rate.
The Zacks analyst believes that pressure on margins (despite rising rates) continue to hurt Hilltop Holdings' revenue growth. Elevated expenses and lower mortgage volume are the other key concerns.
Per the Zacks analyst, DDR Corp.'s aggressive asset disposition is likely to affect its earnings. Competition from e-commerce remains a concern for the company.
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