Tuesday, September 24, 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 Facebook (NASDAQ:FB) (FB), UnitedHealth Group (UNH) and GlaxoSmithKline (GSK). 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’s shares have outperformed the S&P 500 in the past six months (12.4% vs. 6.9%). The Zacks analyst thinks that solid mobile ad revenues, driven by impressive growth in Instagram Stories and Feed, and Facebook News Feed are expected to drive the top line.
Facebook’s initiatives to improve privacy, transparency and authenticity of ads, and remove fake accounts are likely to boost user trust and engagement. Further, the partnership with ESPN for sports streaming on Facebook Watch is positive. The acquisition of CTRL-Lab is a major growth driver for the long haul.
However, the company’s rising regulatory headwinds, including the antitrust investigation and the EU’s investigation of Libra, are concerns. The unfriendly regulatory environment is expected to delay Libra’s launch, which Facebook has targeted for the first half of 2020.
(You can read the full research report on Facebook here >>>)
Shares of UnitedHealth have lost 7.6% in the past three months, outperforming the Zacks Medical Insurance industry’s fall of 7.8%. The Zacks analyst believes that UnitedHealth Group stands apart in the industry by virtue of healthcare services, technology and innovations offered by its unit, Optum.
Numerous acquisitions, made by the company, have broadened its business profile and provide benefits of diversification. Its solid balance sheet and consistent cash flow generation have enabled investment in business, which will drive long-term growth. Also, capital management by dividend payment and share buyback is another positive.
However, slowdown of growth in international operations and underperformance in Medicaid business are some concerns. An increase in leverage and interest burden raises financial risk.
(You can read the full research report on UnitedHealth here >>>).
GlaxoSmithKline’s shares have gained 3.8% over the past year, outperforming the Zacks Large Cap Pharmaceuticals industry’s fall of 1.8% over the same period. The Zacks analyst believes that Glaxo’s three newest products — Trelegy Ellipta, Shingrix and Juluca — are doing well, particularly Shingrix.
These products coupled with restructuring in the Consumer Health unit have strengthened Glaxo’s competitive position. We are encouraged by the company’s initiatives to focus on its oncology pipeline. However, stiff competition, genericization and pricing pressure on key drugs in the Pharma segment are hurting sales.
Particularly, pricing pressure and competitive dynamics are hampering sales of Glaxo’s respiratory products. Importantly, a generic version of its top-selling drug Advair has been launched, which is significantly eroding the drug’s sales. Also, competitive pressure on HIV drugs is rising in 2019.
(You can read the full research report on GlaxoSmithKline here >>>).
Other noteworthy reports we are featuring today include Adobe (ADBE), Duke Energy (DUK) and BlackRock (NYSE:BLK) (BLK).
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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>>>
Today's Must Read
Featured Reports
Adobe (ADBE) Rides on Growing Adoption of Cloud Applications
Per the Zacks analyst, solid momentum across Creative Cloud, Document Cloud and Experience Cloud services is aiding Adobe's cloud business which generates significant amount of revenues.
Investment Plan Aids Duke Energy (DUK), Commodity Prices hurt
Per the Zacks Analyst, the company's robust five-year capital plan will drive earnings base growth.
Enterprise (EPD) to Grow on $6B Midstream Growth Project
Enterprise will generate additional cashflow from $6 billion of midstream growth projects, currently under construction. However, the firm's levered balance sheet is a concern, per the Zacks analyst.
Rising Protein Demand to Continue Fueling Tyson Foods (NYSE:TSN)
Per the Zacks analyst, Tyson Foods gains from rising demand for protein-packed food products, like chicken and beef.
Strong Logic & Foundry To Drive KLA-Tenor's (KLAC) Growth
The Zacks analyst believes that KLA's comprehensive product line and increasing process control spending across foundry and logic players should continue to offer higher growth potential.
Acquisitions Aid BlackRock's (BLK) Growth, High Costs a Woe
Per the Zacks analyst, BlackRock's efforts to expand through acquisitions, and focus on active equity business will likely support profitability.
Lennar (NYSE:LEN) Banks on Core Homebuilding Business, Costs High
Per the Zacks analyst, Lennar benefits from strength in core homebuilding business and improving SG&A leverage.
New Upgrades
Nokia (HE:NOKIA) (NOK) Remains Poised to Benefit from Scalable Business
Per the Zacks analyst, Nokia is driving the transition of enterprises into smart virtual networks by creating a single network for all services, while expanding to structurally-attractive adjacencies.
Tech Data's (TECD) GBO Program to Facilitate Cost Savings
Tech Data expects annual cost savings of $70-$80 million from Global Business Optimization Program by fiscal 2021-end. Per the Zacks analyst, savings will be utilized in making strategic investments.
AGCO Corp (AGCO) Banks on Margin Expansion & Investments
Per the Zacks analyst, AGCO is well poised to gain from margin improvement plan, strategic investment in products and technology as well as its solid capital-allocation plan.
New Downgrades
Weaker Steel Prices to Weigh on Cleveland-Cliffs (CLF)
Per the Zacks analyst, falling U.S. steel prices, partly due to weaker demand, will hurt Cleveland-Cliffs' pellet price realization rate and dent its margins.
Medidata (MDSO) Plagued by Persistent Decline in Margins
Medidata has been witnessing steady decline in gross and operating margins for a couple of quarters. The Zacks Analyst is apprehensive about stiff competition in the clinical trial solutions market.
WABCO (WBC) Hurt by High Raw Material Cost & Declining Sales
Per the Zacks analyst, the U.S.-Sino tariff war is weighing on WABCO's raw material costs, denting margins. Declining global vehicle production is also affecting sales of the auto parts manufacturer.
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UnitedHealth Group Incorporated (NYSE:UNH): Free Stock Analysis Report
GlaxoSmithKline plc (GSK): Free Stock Analysis Report
Facebook, Inc. (FB): Free Stock Analysis Report
Duke Energy Corporation (NYSE:DUK): Free Stock Analysis Report
BlackRock, Inc. (BLK): Free Stock Analysis Report
Adobe Systems Incorporated (NASDAQ:ADBE): Free Stock Analysis Report
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Zacks Investment Research