Top Analyst Reports for Apple, Berkshire Hathaway & Pfizer

Monday, May 4, 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 Apple (AAPL), Berkshire Hathaway (BRK.B) and Pfizer (PFE). 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 >>>

Apple shares have held up strongly in the pandemic-driven market weakness (down -1% vs. -12.1% YTD for the S&P 500), reflecting the must-have status of the company's products and the gowing share of higher-margin services in the company's revenue stream.

Apple’s better-than-expected March-quarter results last week reflected continued momentum in the Services segment, driven by a robust performance of App Store, Apple Music, Video, cloud services and App Store search ad business. However, iPhone sales decreased as both demand and supply were negatively impacted by the outbreak of coronavirus.

Apple didn’t provide any guidance due to the uncertainty triggered by the pandemic. Moreover, the company expects second-quarter iPhone and Wearables business revenues to be worse on a year-over-year basis than the fiscal first quarter. On the contrary, iPad and Mac revenues are expected to improve.

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

Berkshire Hathaway made headlines with the huge negatgive swing in its equity investments account, but that is more of an accounting issue than actual realized loss in the business operating income sense. It nevertheless gave journalists a good excuse to run catchy headlines about pandemic-related losses suffered by the 'Oracle of Omaha'. 

its big quarterly loss. But don't reach too much into that, as the Zacks analyst believes that Berkshire's strong cash position supports earnings-accretive bolt-on buyouts and indicates the company’s financial flexibility. Moreover, continued insurance business growth fuels increase in float.

The company is one of the largest property and casualty insurance companies measured by premium volume. Its inorganic growth story remains impressive with strategic acquisitions. The non-insurance businesses are delivering improved results with increased revenues over the past few years.

A sturdy capital level provides further impetus. However, exposure to cat loss induces earnings volatility and also affects the property and casualty underwriting results. Also, huge capex remains a headwind.

(You can read the full research report on Berkshire Hathaway here >>>)

Pfizer’s shares have lost -1.4% over the past three months against the Zacks Large-Cap Pharmaceuticals industry’s fall of -4.7%. The Zacks analyst believes that the Consumer Healthcare joint venture with Glaxo, the Array acquisition and the pending merger of Upjohn unit with Mylan, if successful, will make Pfizer a smaller company with a diversified portfolio of innovative drugs and vaccines.

The smaller Pfizer should see better revenue growth as the Lyrica LOE cliff will go away. Pfizer expects continued strong growth of key brands like Ibrance, Inlyta and Eliquis to drive sales in 2020. Pfizer also has a strong portfolio of new drugs. However, currency headwinds and pricing pressure are key top-line headwinds.

Pfizer beat estimates for earnings and sales in Q1. However, Pfizer expects a significant impact from coronavirus-related business disruption in Q2, which it expects to ease in the second half of 2020. 

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

Other noteworthy reports we are featuring today include Novartis (NVS), Oracle (ORCL) and Lockheed Martin (LMT).

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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

Apple (AAPL) Banks on Services to Counter Coronavirus Chaos

Berkshire (BRK.B) Gains from Solid Insurance Operations

Ibrance & Other Key Drugs to Drive Pfizer's (PFE) Sales

Featured Reports

New Drugs Boost Novartis (NVS) Amid Generic competition

Per the Zacks analyst, solid performance of key drugs like Cosentyx and Entresto, and contribution from gene therapy, Zolgensma boost Novartis.

Oracle (ORCL) Gains from Cloud Suite Adoption & Partnerships

Oracle benefits from the strong adoption of its cloud offerings. Per the Zacks analyst, partnerships with the likes of Accenture are helping the company rapidly expand its cloud-based clientele.

Solid Order Flow Aid Lockheed (LMT) Amid Coronavirus Woes

Per the Zacks analyst, steady order flow from Pentagon and overseas continues to boost Lockheed's growth.

Phillip Morris (PM) Troubled by COVID-19 Woes, Pricing Aids

Phillip Morris' second-quarter show is likely to bear the largest impact of coronavirus due to lower duty-free sales among other factors. However, the Zacks analyst expects some respite from pricing.

End-Market Woes to Hurt 3M (MMM), Inorganic Activities to Aid

Per the Zacks analyst, 3M (MMM) might be adversely impacted by the end market weakness caused by the coronavirus outbreak.

ADP Rides on Strategic Buyouts Amid Technological Challenges

The Zacks analyst believes that acquisitions help ADP strengthen its position in the HCM market. However, pressure to remain technologically updated to meet varying client demands remains a concern.

Essentials Items Lift Target's (TGT) Sales, Margin a Concern

Per the Zacks analyst, Target witnessed higher sales for Essentials and Food & Beverage categories in April month with solid contribution from digital channel.

New Upgrades

High Gold Prices, Cost Control Efforts to Drive B2Gold (BTG)

Per the Zacks analyst, solid output from its Fekola, Masbate and Otjikoto mines, high gold prices fueled by the coronavirus pandemic and its ongoing cost control actions will drive B2Gold's results.

Murphy USA (MUSA) to Gain from Proximity to Walmart Stores

The Zacks analyst believes that the proximity of Murphy USA's fuel stations to Walmart supercenters helps the company to leverage the strong and consistent traffic that these stores attract.

Agios (AGIO) Rides High on Robust Tibsovo Performance

Per the Zacks analyst, Agios's wholly owned precision medicine Tibsovo has been performing steadily since its launch and driving growth. The drug's label expansion studies are also progressing well.

New Downgrades

Weak Demand, Low Oil Prices to Hurt Caterpillar (CAT)

The Zacks analyst is concerned that Caterpillar's results will bear the brunt of a weak manufacturing sector, low spending in the mining sector, impact of coronavirus pandemic and low oil prices.

Skechers' (SKX) Top-Line Bears the Brunt of Coronavirus

Per the Zacks analysts, coronavirus outbreak has hurt Skechers business activities compelling it to close stores amid shrinking demand and supply chain hurdles.

Texas Capital (TCBI) Exhibit High Debt and Elevated Costs

Per the Zacks analyst, Texas Capital is exposed to high debt level in the current uncertain economic environment. Further, high expenses remain a hindrance to bottom-line expansion of the company.

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Pfizer Inc. (PFE) : Free Stock Analysis Report
 
Oracle Corporation (ORCL) : Free Stock Analysis Report
 
Novartis AG (NVS) : Free Stock Analysis Report
 
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
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