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Top Stock Reports for Amazon, Johnson & Johnson & Home Depot

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Wednesday, December 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 Amazon (AMZN), Johnson & Johnson (JNJ) and Home Depot (HD). 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 Amazon 's shares have outperformed the broader market year to date by a wide margin (the stock is up +14.9% vs. the -12% decline for the S&P 500 as a whole). The Zacks analyst thinks Amazon's strengthening retail position, with the help of its growing global footprint and distribution strength, remains its key growth driver.

Moreover, robust Prime program and its benefits will continue to aid Amazon's retail business. Also, the rapid expansion of grocery services via Prime is a major positive. Additionally, the company's growing brick and mortar presence is a tailwind. Further, increasing AWS regions and its growing adoption will continue to aid Amazon's cloud momentum. Also, a rising number of Alexa compatible devices is a major positive.

The company's growing initiatives are likely to aid its performance in the current holiday season. However, the management has lowered its sales outlook for this season due to changes in Indian holiday timing. Also, rising cloud battle and heavy investment in fulfillment centers are headwinds.

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

Shares of Johnson & Johnson have underperformed the Zacks Large Cap Pharmaceuticals in the past six months, gaining +1% vs. +5.3%. J&J's Pharma segment is performing better than the market in 2018 despite the impact of biosimilars on Remicade sales. Also, the Medical Devices and Consumer units are seeing improving organic growth trends.

Though quite a few key products in J&J's portfolio are facing generic competition, the Zacks analyst thinks new products in all segments, successful label expansion of cancer drugs like Imbruvica and Darzalex and contribution from recent acquisitions will continue to drive top-line growth. J&J enjoys a robust multi-year pipeline of new drugs and line extensions.

Headwinds like generics, pricing pressure and soft global market conditions remain. Allegations that its talc/baby powders contain asbestos which causes the users to develop ovarian cancer have been an overhang on the stock's price lately.

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

Buy-ranked Home Depot 's shares have lost 18.9% in the past six months, marginally underperforming the Zacks Retail Building Products industry's 17% decline. The company has a five-year long trend of beating earnings estimates, which continued in third-quarter fiscal 2018. Moreover, it has delivered positive sales surprise in eight out of the last nine quarters.

Results gained from strength in both professional and do-it-yourself categories. It also benefits from positive customer response for assortments as well as enhancements to drive integrated shopping experience. The company is witnessing strength across store operations as well as digital portals, which reflect strong customer demand in the home improvement markets.

Backed by solid year-to-date performance, the company raised its earnings and sales forecast for fiscal 2018. However, the company saw tough comps comparisons in the fiscal third quarter owing to impacts of hurricane-related sales gains in the prior year. Higher supply chain and transportation costs also continue to hurt margins.

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

Other noteworthy reports we are featuring today include Medtronic (MDT), TD Ameritrade (AMTD) and Paychex (PAYX).

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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

Amazon (AMZN) Banks on Holiday Initiatives & AWS Adoption

J&J's (JNJ) New Product Sales Offset Generic Competition

Home Depot's (HD) Integrated Retail Strategy to Boost Sales

Featured Reports

Mazor Buy Aids Medtronic's (MDT) Spine Arm, CRHF Prospects Bright

The Zacks analyst is optimistic about the newly-closed buyout of Mazor Robotics which should fortify Medtronic's position in robotic spine surgery space. The stabilizing CRHF market also holds promise

TD Ameritrade (AMTD) Records Rise in DARTs; High Costs A Woe

The Zacks analyst believes TD Ameritrade is poised to growth through improving trading activities as DARTs continue to rise.

Acquisition Strategy Aids Heico Corp. (HEI), Rate Risk Hurts

Per the Zacks analyst, Heico's disciplined acquisition strategy supplements overall growth, including organic growth.

Strong Trading Volumes, Balance Sheet Aid MarketAxess (MKTX)

Per the Zacks analyst growing international business and a diversified suite of trading products has led to high trading volumes, which are driving revenues.

FactSet (FDS) Rides on BISAM Buyout, Integrations Risks Remain

The Zacks analyst believes that buyout of BISAM has increased FactSet's international footprint, particularly in Europe.

New Contract Wins, End-Market Diversification Aids Jabil (JBL)

According to the Zacks analyst, Jabil's top-line growth is benefiting from new contract wins in healthcare, automotive, cloud and 5G.

ABM Industries (ABM) Gains From GCA Acquisition, Costs Rise

Per the Zacks analyst, acquisition of GCA Services Group has strengthened ABM's long term operational and financial position.

New Upgrades

Fleet Upgrade, Dividends & Buybacks Buoy SkyWest (SKYW)

The Zacks analyst appreciates the company's efforts to modernize its fleet. Efforts to reward shareholders are also commendable.

BlackBerry (BB) Rides on Strong Software Business & Buyouts

Per the Zacks analyst, BlackBerry's strong software business, which benefits from a comprehensive service portfolio, should enhance operating cash flow. The Cylance buyout will help to boost growth.

Paychex (PAYX) to Benefit From Oasis Outsourcing Buyout

The Zacks analyst believes that acquisition of Oasis will aid Paychex in boosting its professional employer organizations (PEO) growth strategy, strengthening client base and improving revenue growth.

New Downgrades

Rising Expenses Continue to Hurt Principal Financial (PFG)

Per the Zacks analyst, Principal Financial's escalating expenses, mainly due to operating as well as higher benefits, claims and settlement costs, will continue to restrict operating margin expansion.

Permian Pipeline Pinch to Hurt Halliburton's (HAL) Profits

The Zacks analyst is worried about the slowdown in the Permian Basin activities amid the pipeline takeaway constraints, which is likely to be a drag on Halliburton's fourth-quarter earnings.

TransUnion (TRU) Hurt by Seasonality, High Debt Persists

The Zacks analyst believes that high debt may limit TransUnion's future expansion and worsen its risk profile. Seasonality causes considerable fluctuations in revenues.

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

Paychex, Inc. (PAYX): Free Stock Analysis Report

Medtronic PLC (MDT): Free Stock Analysis Report

Johnson & Johnson (JNJ): Free Stock Analysis Report

The Home Depot, Inc. (HD): Free Stock Analysis Report

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

TD Ameritrade Holding Corporation (AMTD): 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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