Monday, April 11, 2022
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 Alphabet Inc. (GOOGL), Amazon.com, Inc. (AMZN), and AbbVie Inc. (ABBV). 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 >>>
Shares of
Alphabet
have outperformed the Zacks Internet – Services industry over the past year (+18.8% vs. +2.8%) on the back of the search giant’s leverage to ad spending and strong cloud division. Alphabet’s expanding data centers will continue to bolster its presence in the cloud space. Further, major updates in its search segment are enhancing the search results.
The Zacks analyst believes that Google’s mobile search is gaining solid momentum. Also, a strong focus on innovation of AI techniques and the home automation space should aid business growth in the long term. Further, its deepening focus on the wearables category remains a tailwind.
The company’s growing efforts to gain a foothold in the healthcare industry are other positives. Also, Alphabet’s expanding presence in the autonomous driving space is contributing well. However, its growing litigation issues and increasing expenses are concerns.
(You can
read the full research report on Alphabet here >>>
)
Amazon
shares have gained lagged the broader market over the past year (-10.4% vs +9%) on persistent worries that the company’s Covid outperformance was at the expense of future results. There is also the issue of growth stocks in the Fed tightening cycle. These are reasonable issues, but the Zacks analyst sees the company well positioned for the long run given solid Prime momentum and solid positioning the cloud space (Amazon Web Services or AWS). Further, robust Alexa skills and expanding smart home products portfolio are positives.
The Zacks analyst believes that a strong global presence and solid momentum among the small and medium businesses remain tailwinds. However, growing expenses associated with supply-chain constraints and labor supply shortages remain concerns.
(You can
read the full research report on Amazon here >>>
)
Shares of
AbbVie
have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+69.1% vs. +38.7%). The Zacks analyst believes that Humira has been performing well in the United States based on strong demand trends. AbbVie has several new drugs in its portfolio, which can drive revenues once Humira loses U.S. exclusivity in 2023. Skyrizi and Rinvoq are going strong. It has an impressive late-stage pipeline with several early/mid-stage candidates that have blockbuster potential.
Allergan’s acquisition has diversified AbbVie’s revenue base into new therapeutic area. However, there are concerns about long-term sales growth once Humira generics enter the U.S. market. Increasing competition from newer therapies is hurting Imbruvica’s sales.
(You can
read the full research report on Abbvie here >>>
)
Other noteworthy reports we are featuring today include Walmart Inc. (WMT), Eli Lilly and Company (LLY), and Toyota Motor Corporation (TM).
Sheraz Mian
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
Alphabet (GOOGL) Benefits From Cloud & Search Initiatives
Prime Momentum & Growing AWS Adoption Benefit Amazon (AMZN)
AbbVie’s (ABBV) Pipeline & New Drugs Key to Long-Term Growth
Featured Reports
Walmart (WMT) Gains on E-Commerce Efforts, Hurt by Cost Woes
Per the Zacks analyst, Walmart’s top line has been gaining on its robust e-commerce initiatives, especially grocery delivery. However, high wage costs and supply-chain hurdles pose threats to margins.
Eli Lilly (LLY) Boasts Solid Diabetes & Alzheimer’s Pipeline
Lilly has an exciting pipeline of potential new medicines including tirzepatide for type II diabetes and donanemab for early Alzheimer’s disease, per the Zacks analyst.
Electrification Push to Aid Toyota (TM) Amid Chip Dearth
While the Zacks analyst is optimistic of Toyota’s stepped-up efforts to roll out new electric and fuel-cell vehicles, chip crunch and high commodity prices would limit near-term sales and profits.
Union Pacific’s (UNP) Payouts & Buybacks Lift, Costs Lay Low
The Zacks analyst welcomes the company’s efforts to add shareholder value despite the current uncertain scenario. However, high operating expenses, mainly due to escalated fuel costs, are worrisome.
Citigroup (C) Advances With Strategic Sell Offs, Costs Rise
Per the Zacks analyst, Citigroup is advancing with global consumer banking business exits to focus on core operations. Yet, high costs on transformation investments and hirings limit the bottom line.
Acquisitions and Strong Capital Position Benefit Aon (AON)
Per the Zacks Analyst, buyouts and tie-ups have enhanced Aon’s capabilities, which, in turn, have driven revenues. Further, a solid capital position remains a key catalyst.
New Customers Aid America Movil (AMX) Sales Amid High Debt
Per the Zacks analyst, America Movil’s rising subscriber base and focused 5G efforts is boosting its top line. However, the firm’s elevated leverage of around 65% is a concern. n
New Upgrades
Hess (HES) to Gain From Liza Phase 2 Development in Guyana
The Zacks analyst is impressed with Hess (HES) commencing production from the second phase of the Liza development, which will improve its cash flow and boost shareholders’ returns.
Focus on Permian Basin, Cost Management Aid Occidental (OXY)
Per the Zacks analyst Occidental’s efficient cost management and expansion of its operation Permian Basin through acquisition of Anadarko will drive its performance over the long run.
Multi-basin Portfolio, Low Cost Asset Aid Murphy Oil (MUR)
Per the Zacks analyst Murphy Oil’s maintenance of a multi-basin portfolio boosts production and low cost operating assets in North America will drive operation.
New Downgrades
Pricing Pressure & Stiff Competition Hurt Perrigo (PRGO) Sales
The Zacks Analyst is concerned about the stiff competition faced by Perrigo in the OTC market. The pricing pressure and changing dynamics in the U.S. market are also hurting the company’s sales.
Higher Input Costs, Chip Shortage Hurt DuPont (DD)
Per the Zacks analyst, higher raw material costs due to supply-chain disruptions will weigh on DuPont’s margins. The semiconductor shortage is also affecting volumes in its Mobility & Materials unit.
Envestnet (ENV) Grapples With Expenses and High Debt
The Zacks Analyst believes that rising expenses resulting from increases in website and systems development costs are likely to weigh on Envestnet’s bottom line.
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