Top Research Reports for Roche, Philip Morris & HSBC

Friday, June 3, 2022

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 Roche Holding AG (RHHBY), Philip Morris International Inc. (PM), and HSBC Holdings plc (HSBC). 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 >>>

Roche shares have declined -4.2% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +23.6%, reflecting reduced demand for its COVID-19 medicines and diagnostics. The decline in sales of legacy drugs like Herceptin, Avastin and MabThera has also affected revenues and will drag the top-line further. Biosimilar competition for key drugs weighs on its performance. Competition is stiff for Tecentriq as well.

However, first quarter was good on the back of the diagnostics division, which maintained its stellar performance on demand for COVID-19 tests. Nevertheless, the pharmaceuticals business also remained stable and newer drugs continue to offset the decline in sales of legacy drugs, and also approval of new drugs should also boost the top line.

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

Philip Morris shares have gained +14.3% over the past year against the Zacks Tobacco industry’s gain of +16.5%. The Zacks analyst believes that the company has been benefiting from its pricing power, which aided its first-quarter 2022 results. The top and the bottom lines increased year on year. Strength in IQOS and the combustible business drove performance despite headwinds.  Pricing for combustible products rose more than 3% and by roughly 6% on excluding Indonesia. Strength in the reduced-risk products category has been benefiting the company for a while now.

However, the company has been facing supply-chain and regulatory hurdles in its Russian business, and has taken steps to scale down its operations in the region, due to the Ukraine war. The war has further disrupted the global supply chain and has increased the inflationary pressure in certain materials and services.

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

HSBC shares have outperformed the Zacks Banks - Foreign industry over the past year (+9.4 % vs. -5.2%). The Zacks analyst believes that a strong capital position, initiatives to strengthen digital capabilities, an extensive network and improvement in operating efficiency through business restructuring will likely keep aiding growth. Exiting from the U.S. and French retail banking operations are expected to help the company focus on Asia. In sync with this, the acquisition of AXA Singapore insurance assets will expand the company's business in the region.

Though initiatives to improve market share in the U.K. and China will continue to support financials, these might lead to a rise in expenses, which will likely hurt HSBC’s bottom line to an extent in the near term. Relatively lower interest rates across the globe (despite rate hike expectations) will likely continue to hamper revenues.

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

Other noteworthy reports we are featuring today include Advanced Micro Devices, Inc. (AMD), QUALCOMM Incorporated (QCOM), and Lockheed Martin Corporation (LMT).
 
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

Newer Drugs Fuel Roche (RHHBY), Biosimilar Competition Weighs

Philip Morris (PM) Benefits From Robust Pricing Efforts, RRPs

Restructuring to Aid HSBC Holdings (HSBC), High Costs a Woe

Featured Reports

Chevron (CVX) to Gain from Massive Permian Acreage
The Zacks analyst believes that Chevron's premier position in the Permian Basin positions it for sustainable production ramp-up but is worried about the supermajor's weak reserve replacement ratio.

Robust Product Portfolio & Partnerships Aid AMD's Prospects
Per the Zacks analyst, Advanced Micro Devices is benefiting from strong adoption of EPYC, Ryzen and Radeon processors. Moreover, alliances with Baidu, Amazon and Microsoft, bode well.

Qualcomm (QCOM) Rides on Solid 5G Traction, Holistic Growth
Per the Zacks analyst, Qualcomm is well-positioned to benefit from solid 5G traction with greater visibility, accretive acquisition and diversified businesses to meet its long-term revenue targets.

Order Growth Boosts Lockheed (LMT), Tiff With Turkey Ails
Per the Zacks Analyst, steady order flow continues to boost Lockheed's revenue growth. Yet, the U.S. government's Tiff with Turkey over its involvement in Russia's S-400 may hurt F-35 program.

Strategic Buyout Aid Boston Scientific (BSX), Forex Woes Ail
The Zacks analyst is bullish about Boston Scientific's strategic buyouts including Lumenis which is expected to expand the company's Urology portfolio. Yet, foreign exchange woes remain a concern.

Strategic Efforts, Lower Costs Aid Hartford Financial (HIG)
Per the Zacks analyst, a number of strategic initiatives such as vending of non-core businesses to focus on its U.S. operations bode well. Reduced expenses might aid the company's margins in the days

Verisk (VRSK) Benefits From Acquisitions Amid High Debt
The Zacks analyst is impressed with Verisk's acquisition strategy to expand data and analytics capabilities across industries. However, high debt remains a concern.

New Upgrades

Valero (VLO) Gains on Higher Gulf Coast Refinery Throughput
The Zacks analyst is impressed by Valero's Gulf Coast refineries, contributing the most to its total throughput volumes. Higher Gulf Coast export volumes will also support its margins.

Strong Automotive End-Market Aids onsemi's (ON) Prospects
Per the Zacks analyst, onsemi benefits from strong demand for its solutions in the automotive end-market. Its fab-lighter strategy is expected to drive gross margin expansion.

Strength in Industrial Business to Drive RBC Bearings (ROLL)
Per the Zacks analyst, strong momentum in RBC Bearings' industrial business, led by strength in mining, energy, semiconductor and general industrial end markets should drive its top-line performance.

New Downgrades

Elevated Input Costs Ail Rockwell Automation's (ROK) Margins
The Zacks analyst is concerned that elevated input costs and manufacturing challenges due to supply chain and logistic disruptions will continue to weigh on Rockwell Automation's results this year.

Rising Competition & Currency Headwinds Hurt Teradata (TDC)
Per the Zacks analyst, Teradata is suffering from increasing competition in the analytic data solutions market. Also, unfavorable foreign currency fluctuations remain concerns.

Higher Commodity Costs & Inflation Hurts Wendy's (WEN)
Per the Zacks analyst, higher labor rate, increase in commodity costs and decline in customer counts is likely to hurt Wendy's margin.

Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.