Top Research Reports for Facebook, Verizon & Pfizer

Monday, July 27, 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 Facebook (FB), Verizon Communications (VZ) and Pfizer (PFE). 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 >>>

Facebook shares have been essentially flat over the last few weeks, likely reflecting unfavorable headlines related to advertizer boycotts. But the stock has outperformed the S&P 500 over the past year (+18.9% vs. +6.9%) and the Zacks analyst expects the stock to move higher following strong numbers in its quarterly release after the market's close on Wednesday, July 29th.

Driving this optimism is the view that the company should continue to benefit from growth in Instagram Stories and Feed, and an expanding user base in Asia Pacific.

The company helped people connect during the coronavirus pandemic. Notably, voice and video calling more than doubled on Messenger and WhatsApp. The launch of Messenger Rooms for video call, which can accommodate 50 people, and WhatsApp video support for up to eight users are noteworthy in this regard.

However, Facebook expects ad-sales to be hurt by weakness in travel and automotive industries. Further, a number of companies have announced plans to freeze ad spending on Facebook due to its failure to eradicate hate speech and misinformation. This is expected to hurt top-line growth, at least in the near term. Higher operating expense is also expected to dent the operating margin in 2020.

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

Shares of Verizon have modestly lagged the Zacks Wireless industry this year (-6.9% vs. -5.7%), but the Zacks analyst is optimistic about this wireless operator on the back of a disciplined network strategy, including accelerated 5G deployment despite economic uncertainties stemming from the COVID-19 crisis.

It launched 35th 5G Ultra Wideband city in San Diego and intends to make 60 5G mobility cities this year. It is building the 5G home solution and mobile edge computing on the same network. Verizon expects to see strong momentum heading into the second half of 2020.

However, it is facing headwinds in the media business due to sluggish advertising trends. The company operates in a fiercely-competitive U.S. wireless market. Also, Verizon is spending heavily on promotion and lucrative discounts to attract customers, which erodes profitability.

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

Pfizer shares have lost -1.2% over the past six months against the Zacks Large-Cap Pharmaceuticals industry’s rise of +0.5%. The Zacks analyst believes that the Consumer Healthcare joint venture with Glaxo, the Array acquisition and the pending merger of Upjohn unit with Mylan, if successful, will make Pfizer a smaller company with a diversified portfolio of innovative drugs and vaccines.

The smaller Pfizer should see better revenue growth as the Lyrica LOE cliff will go away. Pfizer expects continued strong growth of key brands like Ibrance, Inlyta and Eliquis to drive sales in 2020. However, Pfizer expects a significant impact from coronavirus-related business disruption in Q2, which it expects to ease in the second half.

Meanwhile, currency headwinds and pricing pressure are other top-line headwinds. Estimates have gone up ahead of Q2 earnings. Pfizer has a mixed record of earnings surprises in the recent quarters.

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

Other noteworthy reports we are featuring today include Novartis (NVS), NextEra Energy (NEE) and Philip Morris International (PM).

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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

Instagram Strength Aids Facebook (FB) Amid Advertiser Exodus

Verizon (VZ) Rides on 5G Mobility Amid Headwinds in Media Unit

Ibrance & Other Key Drugs to Drive Pfizer's (PFE) Sales

Featured Reports

New Drugs Boost Novartis (NVS) Amid Generic competition

Per the Zacks analyst, solid performance of key drugs like Cosentyx and Entresto, and contribution from gene therapy, Zolgensma boost Novartis.

Investment in Infrastructure and Renewable Aid NextEra (NEE)

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

Pricing Aids Phillip Morris (PM), COVID-19 Barriers Hurt

Per the Zacks analyst, Phillip Morris is likely to gain on solid pricing, which aided performance in second quarter. However, near-term sales are likely to be hurt by COVID-19 related restrictions.

AMD Rides on Robust 7nm Product Portfolio & Partnerships

Per the Zacks analyst, Advanced Micro Devices is benefiting from strong adoption of latest 7 nm-based EYPC and Ryzen processors.

da Vinci System Aids Intuitive Surgical (ISRG), Margins Hurt

Per the Zacks analyst, solid prospects in Intuitive Surgical's robot-based da Vinci surgical system continues to aid the company.

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. However, pricing pressure continues to remain a woe.

UBS Remains Focused on Achieving Performance Targets

Per the Zacks analyst, UBS Group's several financial targets are expected to improve operating efficiency. Also, these efficiency programs are likely to support the company's bottom-line.

New Upgrades

Best Buy's (BBY) Focus on Omni-Channel Capabilities Bode Well

Per the Zacks analyst, Best Buy is gaining from solid omni-channel capabilities. It has been innovating digital experiences through curbside pick up and the in-store consultation process.

Solid Beverage Can Demand to Drive Crown Holdings (CCK)

Per the Zacks Analyst, Crown Holdings will benefit from the rising global beverage can demand aided by consumers growing preference for cans over other packaging options.

Free Cash Flow and Cost Cutting Boost Knight-Swift (KNX)

The Zacks analyst is impressed with the company's increased operational efficiency, courtesy of its cost-control efforts. Its strong free cash flow generation is an added positive.

New Downgrades

Ceased Atlantic Coast Pipeline, Dilution Ail Dominion (D)

Per the Zacks analyst Dominion's decision to discontinue the Atlantic Coast Pipeline after investing billions of dollars in past six years and share dilution are likely to impact performance.

Wayfair (W) Hurt by Growing Expenses & Rising Competition

Per the Zacks analyst, Wayfair is suffering from increasing advertising and investment spending. Further, growing competition in e-commerce space from a dominant player like Amazon remains a headwind.

Weak Market Demand & High Debt Hurt Applied Industrial (AIT)

Per the Zacks analyst, Applied Industrial is struggling with weakness across its mining, machinery, oil & gas, and metal end markets amid the coronavirus outbreak. High debt level remains concerning.

Click to get this free report

Verizon Communications Inc. (VZ): Free Stock Analysis Report

Philip Morris International Inc. (PM): Free Stock Analysis Report

Pfizer Inc. (PFE): Free Stock Analysis Report

Novartis AG (NVS): Free Stock Analysis Report

NextEra Energy, Inc. (NEE): Free Stock Analysis Report

Facebook, Inc. (FB): 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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