Wednesday, December 18, 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) (JNJ), Eli Lilly (LLY) and PNC Financial (PNC). 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 outperformed the Zacks Large Cap Pharmaceuticals industry year to date (+11.2% vs. +10.2%). The Zacks analyst believes that J&J has been witnessing significant generic/biosimilar headwinds in the Pharma unit in 2019.
However, the unit is performing above-market levels, supported by contribution from new drugs like Tremfya and successful label expansion of cancer drugs like Imbruvica and Darzalex and immunology drug, Stelara. J&J is also making rapid progress with its pipeline/line extensions. It has already gained FDA approval for two new drugs in 2019, Balversa and Spravato.
Share buybacks and restructuring initiatives should provide bottom-line support. However, headwinds like biosimilar/generic competition and pricing pressure remain. Moreover, J&J faces numerous lawsuits, which allege personal injuries to patients caused by the use of its products.
(You can read the full research report on Johnson & Johnson here >>>)
Shares of Eli Lilly have gained 9.6% in the past three months against the Zacks Large Cap Pharmaceuticals industry’s rise of 11.1%. The Zacks analyst believes that Lilly’s revenue growth is being driven by higher demand for its newer drugs including Trulicity, Jardiance, Taltz, Verzenio and new migraine drug, Emgality, as some older drugs like Cialis face generic competition.
Lilly has made significant pipeline progress in the past year with several positive late-stage data readouts, multiple approvals and regulatory submissions. Lilly also added promising new pipeline assets through business development deals.
However, rising competitive pressure on Lilly’s drugs, generic competition for several drugs including Cialis, rising pricing pressure in the United States, price cuts in some international markets, currency headwinds and the impact of the failed Lartruvo study are putting pressure on the top line.
(You can read the full research report on Eli Lilly here >>>)
PNC Financial's shares have gained +20.4% over the past six months against the Zacks Major Regional Banks industry's rise of +21.4%. The Zacks analyst believes that company's commitment to expand middle market lending franchise and expand its digital products and services offerings bodes well.
Shares of PNC Financial have outperformed the industry over the past three months. Also, it has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters.
Moreover, execution of inorganic strategies in order to diversify revenue sources is likely to continue bolstering fee income. Also, rising loans and deposits balance keep PNC Financial well poised for growth.
However, with growing business and investment in technology the company's expense base is expected to keep escalating, which poses a concern. Also, lack of diversification in loan portfolio is a headwind.
(You can read the full research report on PNC Financial here >>>)
Other noteworthy reports we are featuring today include EOG Resources (NYSE:EOG) (EOG), Koninklijke Philips (PHG) and Archer-Daniels-Midland (ADM).
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Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.6% per year. So be sure to give these hand-picked 7 your immediate attention.
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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 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
EOG Resources (EOG) Banks on Oil-Rich Eagle Ford Acreage
Huge inventory of premium drilling locations in Eagle Ford shale play will contribute to EOG Resources' oil production, per the Zacks analyst. However, rising lease & well expenses hurt the firm.
Portfolio Strength Drives Philips (PHG) Amid Tariff Concerns
Per the Zacks analyst, Philips is benefiting from strength in its Diagnosis & Treatment business. However, tariff related concerns related to U.S.-China trade war doesn't bode well for the company.
Archer Daniels' (ADM) Readiness Program to Bolster Growth
Per Zacks analyst, Archer Daniels' Readiness goals of business growth and standardized functions are on track.
Pioneer Natural (PXD) to Gain From Strong Permian Presence
Per the Zacks analyst, strong focus on the prolific Permian Basin is likely to boost Pioneer Natural's oil volumes.
Growing Demand for Live Programming Benefits Fox (FOXA)
Per the Zacks analyst, Fox is expected to gain traction from growing demand for live programming, which is relatively immune to growing competition from subscription-based video-on-demand services.
Best Buy's (BBY) Building the New Blue Program Bodes Well
Per the Zacks analyst, Best Buy's Building the New Blue strategy will help pursue growth opportunities, better execution in key areas, cost containment, and investing in people and systems.
Rising Loans Support Cullen/Frost (CFR), Cost Woes Linger
Per Zacks analyst, Cullen/Frost is well poised to enhance top-line driven by steady growth in loans.
New Upgrades
Vyondys Approval to Pare Sarepta's (SRPT) Exondys Dependence
Per the Zacks analysts, recent FDA's approval to Sarepta's new DMD drug, Vyondys 53, is likely to help the company to reduce its dependence on sole marketed DMD drug, Exondys 51, for growth.
Strong Demand, Acquisitions to Aid Reliance Steel (RS)
Per the Zacks analyst, Reliance Steel is likely to gain from the strong momentum across aerospace and automotive markets. It should also benefit from acquisitions and diversified product base.
Transformation Plans to Drive Sally Beauty's (SBH) Top Line
Per the Zacks analyst, Sally Beauty is set to benefit from transformation plan, which includes improving customers' experience, strengthening e-commerce, curtailing costs and enhancing retail sales.
New Downgrades
Higher Operating Costs to Hurt Dollar Tree's (NASDAQ:DLTR) Margins
Per the Zacks analyst, elevated freight and distribution costs, increased sale of low-margin merchandise and higher shrink are hurting Dollar Tree's margins. This should persist in fiscal 2019.
Weak Storage Business & Stiff Competition Ail NetApp (NASDAQ:NTAP)
Per the Zacks analyst, NetApp is hurt by sluggishness in storage business owing to uncertainty in broader macroeconomic environment.
Seasonal Change in Demand, Volatile Prices Ail ONE Gas (OGS)
Per the Zacks analyst ONE Gas' performance could get adversely impacted by the volatile commodity prices and seasonal variation in demand for natural gas.
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The PNC Financial Services Group, Inc (NYSE:PNC): Free Stock Analysis Report
Koninklijke Philips N.V. (PHG): Free Stock Analysis Report
Eli Lilly and Company (NYSE:LLY): Free Stock Analysis Report
Johnson & Johnson (JNJ): Free Stock Analysis Report
EOG Resources, Inc. (EOG): Free Stock Analysis Report
Archer Daniels Midland Company (ADM): Free Stock Analysis Report
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Zacks Investment Research