Friday, April 3, 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 Amazon (AMZN), Medtronic (MDT) and Vertex Pharmaceuticals (VRTX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amazon’s shares have outperformed the S&P 500 over the past six months (+10.3% vs. -14.2%). The Zacks analyst believes that Amazon is benefiting from its aggressive retail strategies, distribution strength and robust Prime program.
Rapid adoption of Prime driven by customer benefits and strengthening grocery services is aiding its top line. Also, expanding content portfolio is encouraging Prime membership. Further, strengthening AWS services and its growing adoption rate are aiding Amazon’s dominance in the cloud space. Furthermore, improving Alexa skills and features remain major positives.
Also, rising number of Alexa compatible devices is a tailwind. However, rising transportation cost related to its free one-day shipping service remains an overhang and is likely to increase further. Further, foreign exchange headwinds are concerns. Additionally, rising cloud competition poses risk.
Shares of Medtronic have lost -4% over the past year against the Zacks Medical Products industry’s fall of -15.8%. The Zacks analyst believes that within RTG, strong sales at Specialty and Brain Therapies more than offset slower growth in Pain Therapies.
Within CVG, despite the ongoing challenges, the company registered 1.8% growth at CER. The MITG arm recorded sturdy growth on strength across all businesses. The 2020 EPS guidance also looks promising.
However, its revenues lagging estimates, and escalating costs and expenses have been persistently pressurizing the margins. Unfavorable currency movement also deterred growth. The difficult macroeconomic conditions due to coronavirus outbreak is concerning as well.
Vertex’s shares have gained 8.1% over the past three months against the Zacks Biomedical and Genetics industry’s fall of -7.1%. The Zacks analyst expects Vertex’ sales in 2020 to be primarily driven by the uptake of Trikafta as well as higher international revenues due to additional ex-U.S. reimbursement arrangements in key countries like England and France.
Trikafta’s early approval and launch was a key milestone for Vertex. Trikafta is crucial for Vertex’s long-term growth as it has the potential to treat up to 90% of CF patients. Meanwhile, Vertex’s non-CF pipeline is progressing rapidly with data in multiple diseases expected in 2020. However, competitive pressure is rising in the CF market.
Also, Vertex’s dependence on just the CF franchise for growth is a concern. Estimates have declined ahead of Q1 earnings due to the coronavirus impact. Vertex has a positive record of earnings surprises in the recent quarters.
Other noteworthy reports we are featuring today include Intuit (INTU), Bayer (BAYRY) and FirstEnergy (FE).
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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
Per the Zacks analyst, Intuit is gaining from solid adoption of TurboTax Live offering, and its lending product – QuickBooks Capital.
Per the Zacks analyst, Bayer’s focus on the Life Science businesses and acquisitions to boost its portfolio is a huge positive.
Per the Zacks analyst, transition to a fully-regulated utility and long-term investments under ‘Energizing the Future’ initiative will add to FirstEnergy’s overall operational strength.
Per Zacks analyst, TD Ameritrade’s improved digital platforms have helped it witness higher client activities, thus aiding revenues.
According to the Zacks analyst, the company will gain from progress in its key growth projects and its investment in assets to expand production.
Per the Zacks analyst, its digitally imitated money transfer business that includes westernunion.com and Mobile Money Transfer has led to significant growth.
Per the Zacks analyst, United Rentals gains from improved demand in construction end-markets served and accretive acquisitions.
Per the Zacks analyst, Philips continues to benefit from growing Diagnosis & Treatment business on the back of partnerships, expanding geographical coverage and innovative solutions.
LogMeIn is poised to benefit from rising demand for offsite-working as growing incidences of coronavirus has led organizations across the globe allowing their employees to work from home.
Per the Zacks analyst, solid product offerings and the combination of Altra Industrial’s operations with Fortive’s Automation and Specialty platform will continue to lend momentum to the company.
The Zacks analyst is worried over PetroChina’s losses on the domestic resale of imported natural gas below cost. The drop in the company’s downstream segment earnings is also a concern.
Per the Zacks analyst, weakening U.S. steel prices is likely to affect Nucor’s margins as prices will remain under pressure amid production increase.
Per the Zacks analyst, market volatility, continued softness in the high-end housing market and coronavirus-related woes are expected to hurt RH’s near-term results.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.