Top Research Reports for Home Depot, Glaxo & Marriott

Thursday, February 22, 2018

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 Home Depot (HD), Glaxo (GSK) and Marriott (MAR). 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 >>>

Home Depot’s shares have gained +26.5% over the last one year, outperforming the Zacks Retail Building Products industry’s +23.5% increase backed by its five-year long trend of beating earnings estimates, which continued in fourth-quarter fiscal 2017. Further, sales topped estimates for the sixth straight quarter.

Results gained from strength in core business as well as relentless focus on affording innovative products, boosting interconnected customer experience and driving productivity. Steady housing market recovery and strong customer demand also remain tailwinds. Further, the company provided an optimistic view for fiscal 2018.

Concurrently, it reiterated financial targets for fiscal 2020 and raised the return on invested capital target to reflect gains from the recent tax reform. However, gross margins continued to be soft due to impacts from lower margin hurricane-related sales. The company anticipates gross margins to decline in fiscal 2018, excluding the 53rd week, due to tight transportation market.

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

Shares of Glaxo have underperformed the Zacks Large Cap Pharmaceuticals industry over the last year, losing -10.4% versus the industry’s +9.7% increase. Glaxo beat estimates for both earnings and sales in Q4.

The Zacks analyst likes Glaxo’s efforts to develop its pipeline. Performance of new products has been encouraging. Meanwhile, back-to-back approvals of three new products -- Trelegy Ellipta, Shingrix and Juluca -- have strengthened Glaxo’s competitive position.

However, persistent challenges like stiff competition, genericization, pricing pressure and slowing growth in emerging markets have been hurting sales. Pricing pressure and competitive dynamics are hurting sales in Glaxo’s respiratory franchise, particularly the older products.

Meanwhile, its top-selling product, Advair is also expected to face generic competition in the United States this year, which will further hurt sales. The slowdown in sales of the Consumer Healthcare segment in 2017 is also a concern.

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

Buy-rated Marriott’s shares have outperformed the Zacks Hotels industry over the last one year. (the stock is up +63.2% vs. +42.7% gain for the industry). Marriott is currently benefiting from Starwood acquisition, rising North-American business, sizeable international exposure and an attractive brand-position. The company also saw upward revisions for 2018 earnings over the last 60 days.

Notably, with the acquisition of Starwood, Marriott became the world's largest hotel company. In fact, this buyout is likely to result in a bigger brand with increased scale and a robust development pipeline in the long run.

Yet, lingering political uncertainties in key international markets and currency headwinds might continue to limit revenue growth. Moreover, integration risks linked to Starwood purchase is an added concern. Even so, its investments in technology for hotel bookings are anticipated to improve guest experience.

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

Other noteworthy reports we are featuring today include Valero (VLO), DISH Network (DISH) and O'Reilly Automotive (ORLY).

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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

Home Depot's (HD) Strategies Aid Growth, Gross Margin Suffers

New Drugs Boost Glaxo (GSK), Competition Hurts Advair

Marriott (MAR) Rides on Starwood Buyout & Expansion Plans

Featured Reports

Valero's (VLO) Higher Throughput Volume to Offset Debt Load

The Zacks analyst believes improving throughput volume on higher refinery utilization will help Valero generate more cash flow. However, escalating debt load is a concern.

Concho Resources (CXO) Buoyed By Permian Focus

The Zacks analyst is optimistic about Concho Resources' strategic acreage position in the low cost-high margin Permian Basin which is likely to drive the company's output at 20% CAGR over 2017-2020.

Airfreight Revenues & Dividends Buoy Expeditors (EXPD)

The Zacks analyst is impressed by the company's efforts to reward shareholders. Robust airfreight revenues and volume growth are further positives.

Navigant (NCI) Focuses on Data Analytics to Defy Margin Woes

Per the Zacks analyst, Navigant is developing data analytic tools across multiple groups to meet the growing demand for technology-enabled solutions as it faces stiff competition and depleting margin.

Product Launches to Aid Goodyear (GT), Rising Costs a Concern

Per the Zacks analyst, new technologies for fleet services will push Goodyear's growth momentum.

O'Reilly (ORLY) to Win From Store Openings, Network Growth

Per the Zacks analyst, O'Reilly's plan to open 200 more stores and focus on improving distribution networks' logistic capability will allow it to expand in existing and new markets.

Groupon (GRPN) Rides on Strategic Deals & Product Rollouts

Per the Zacks analyst, Groupon's partnership with Grubhub and ParkWhiz along with ongoing brand awareness programs will aid revenues.

New Upgrades

Wireless Spectrum, Internet TV Services Boost DISH (DISH)

Per the Zacks analyst, DISH Network is strong on the back of extensive wireless spectrum portfolio. The company's Internet TV service gained 0.711 million customers despite cord-cutting.

Allegion's (ALLE) Acquisitions, Innovations to Drive Growth

Per the Zacks analyst, Allegion's acquisitions, focus on innovations along with a solid footprint in emerging markets is expected to boost revenues.

Strong Adoption of Fiber Lasers & Acquisitions Aids IPGP

Per the Zacks analyst, IPG Photonics' strong adoption of fiber lasers over conventional lasers is driving growth. Further, Menara Networks and ILT buyout will aid IPGP in enhancing product offerings.

New Downgrades

Lower Production & Higher Costs to Hurt Agnico Eagle (AEM)

Per the Zacks analyst, Agnico Eagle's margins are likely to be hurt in 2018 owing to higher unit costs, mainly resulting from lower expected gold production compared to last year.

Food Deflation to Hurt Companhia Brasileira (CBD) Margins

Per the Zacks analyst, food deflation has been a major hurdle for Companhia Brasileira, which hurt fourth-quarter EBITDA margin at both Assai and Multivarejo. This headwind is likely to linger in 2018

Dull Total Software Unit Ails Quality Systems (QSII)

Per the Zacks analyst, sluggishness in the Total Software, Hardware and Related segment will keep Quality Systems' margins under pressure. Cutthroat competition in the HCIT space is a headwind.

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Valero Energy Corporation (VLO) : Free Stock Analysis Report
 
O'Reilly Automotive, Inc. (ORLY) : Free Stock Analysis Report
 
Marriott International (MAR) : Free Stock Analysis Report
 
Home Depot, Inc. (The) (HD) : Free Stock Analysis Report
 
GlaxoSmithKline PLC (GSK) : Free Stock Analysis Report
 
DISH Network Corporation (DISH) : Free Stock Analysis Report
 
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