Top Research Reports For Johnson & Johnson, Boeing & Starbucks

Monday, January 28, 2019

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 Johnson & Johnson (NYSE:JNJ), Boeing (BA) and Starbucks (SBUX). 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 >>>

Johnson & Johnson’s shares have underperformed the Zacks Large Cap Pharmaceuticals in the past year, losing -10.8% vs. -6.6%. J&J beat estimates for both earnings and sales in Q4. J&J’s sales growth accelerated in 2018 backed by above-market sales growth in the Pharmaceutical segment and improving performance in Medical Devices unit.

However, J&J’s sales growth guidance for 2019 was below expectations due to generic/biosimilar headwinds in the Pharma unit, which is expected to hurt sales by $3 billion in 2019. The Zacks analyst thinks J&J’s sales and earnings growth will accelerate in 2020 supported by drug launches, successful label expansion of cancer drugs like Imbruvica and Darzalex and immunology drug, Stelara.

J&J is also making rapid progress with its pipeline and line extensions. Meanwhile, share buybacks and restructuring initiatives should provide bottom-line support. Headwinds like biosimilar/generic competition and pricing pressure remain.

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

Shares of Strong Buy-ranked Boeing have gained +6.9% over the past year, outperforming the Zacks Aerospace & Defense industry, which declined -8.4% during the same time period. The Zacks analyst emphasizes that the company is the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries.

The company’s 20-year market outlook forecasts commercial jetliner demand to increase by 4.1%, with single-aisle jets being the major driver behind this demand growth. Boeing expects the commercial fleet to be fueled by sustained annual growth in commercial passenger traffic along with a big wave of retiring, old planes.

Boeing’s strong balance sheet and cash flows provide financial flexibility in matters of incremental dividend, ongoing share repurchases and earnings accretive acquisitions. However, the aerospace giant may face competitive challenges if new manufacturers like China enter the commercial jet space. Engine-related issues pertaining to its 787 fleet may also hurt the company's growth.

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

Buy-ranked Starbucks’ shares are up +29.2% over the past six months, outperforming the Zacks Food & Restaurants industry, which is up +13.6% over the same period. The Zacks analyst thinks the uptrend is likely to continue as the company not only reported impressive first-quarter fiscal 2019 results but also raised its earnings outlook for the fiscal year.

Notably, both the top and bottom lines surpassed the Zacks Consensus Estimate for the third successive quarter. Robust Americas and China comparable store sales too bode well. Also, the company’s operating fundamentals such as solid global footprint, successful innovations, best-in-class loyalty program and digital offerings are encouraging.

Again, digital initiatives like mobile order/pay and delivery services can further stimulate robust sales trends. Starbucks partnership with Nestle SA (SIX:NESN) will also drive growth. However, operating margin contraction over the past few quarters has been a major concern. Being a retail restaurant, Starbucks is dependent on consumer discretionary spending environment.

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

Other noteworthy reports we are featuring today include Valmont Industries (VMI), Norfolk Southern (NSC) and Prologis (PLD).

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>

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 Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>