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Top Stock Analyst Reports for Merck, Philip Morris & American Tower

Mark Vickery

Wednesday, February 12, 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 Merck (MRK), Philip Morris International (PM) and American Tower (AMT). 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 >>>

Merck’s shares have underperformed the Zacks Large-Cap Pharmaceuticals industry over the past year (+7.9% vs. +13.3%). The Zacks analyst believes that drugs like Keytruda, Lynparza and Bridion have been driving sales. Keytruda sales are gaining from continued uptake in lung cancer and increasing usage in other cancer indications.

Keytruda has strong growth prospects based on increased utilization, recent approvals for new indications and potential additional approvals worldwide. Animal health and vaccine products remain core growth drivers.

The potential separation into two companies makes strategic sense as the remaining Merck should be able to achieve higher profits than the combined company. However, generic competition for several drugs and rising competitive pressure, mainly on the diabetes franchise will continue to be overhangs on the top line. 

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

Shares of Philip Morris have gained +6.5% in the past six months against the Zacks Tobacco industry's rise of +7.8%. The Zacks analyst believes that the company continues to battle receding cigarette volumes due to stringent regulations and rising health consciousness.

Notably, strong pricing aided the company’s revenues and adjusted operating income in the fourth quarter of 2019. Results were also aided by cost-efficiencies and gains from RRPs, which, in turn, is benefiting from broad-based IQOS growth.

During the quarter, the top line grew and topped the consensus mark. Management expects pricing to be a driver in 2020, and remains focused on its RRP investments. Cigarette volumes are likely to drop in 2020, wherein international industry volumes are also expected to decline due to hurdles in Indonesia among other factors.

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

American Tower’s shares have gained +20.9% over the past three months against the Zacks REIT and Equity Trust industry's rise of +8.6%. The Zacks analyst believes that the trend in estimate revisions of 2020 funds from operations (FFO) per share indicates a favorable outlook for the company.

Notably, the company is enhancing its macro-tower portfolio and focusing on innovation to capture the underlying opportunities. Further, rise in mobile-data usage and higher investments in 4G, as well as 5G technology is spurring demand for its telecom towers.

This will likely drive the company’s leasing activity and organic tenant billings growth in the upcoming period. In addition, its attempt to increase shareholder value through dividend hikes boost investors’ confidence in the stock. Yet, the company has a substantially-leveraged balance sheet. Such high-debt levels might impede cash-flow growth.

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

Other noteworthy reports we are featuring today include T-Mobile US (TMUS), Allergan (AGN) and Advanced Micro Devices (AMD).

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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

Newer Drugs Drive Merck's (MRK) Sales as Competition Soars

Pricing Aids Phillip Morris (PM) Amid Low Cigarette Volumes

Steady Demand Buoys American Tower (AMT), Debt Woes Linger

Featured Reports

T-Mobile (TMUS) Rides on Customer Growth, 5G Network & Merger

Per the Zacks analyst, T-Mobile is likely to gain from total net customer additions and the green signal for its merger with Sprint in Federal Court.

Botox & Others Drive Allergan (AGN) Sales Amid Generic Woes

The Zacks analyst says that Allergan's key products like Botox, Viberzi and Vraylar are driving sales as loss of exclusivity hurts some others.

AMD Banks on Product Portfolio and Partnership Strength

Per the Zacks analyst, Advanced Micro Devices is benefiting from robust adoption of latest EYPC, Ryzen and Radeon processors.

Cost-Cut Efforts Aid Norfolk Southern (NSC) Amid Debt Woes

Though concerned about its high debt levels and sluggish overall volumes, the Zacks Analyst likes the company's prudent cost management and shareholder-friendly measures.

Eni (E) to Ride on Exploration Campaign in Offshore Angola

The Zacks analyst believes Eni's exploration campaign in offshore Angola, which led to several new discoveries, to boost cash flow.

Freight Revenues Aid Canadian Pacific (CP), High Debt Ails

The Zacks analyst is impressed by the substantial rise in freight revenues, accounting for the bulk of its top line.

Electronic Focus Aid Interactive Brokers (IBKR), Costs a Woe

Per the Zacks analyst, development of proprietary software and focus on the Electronic Brokerage segment will aid Interactive Brokers. Higher costs due to technology upgrades will likely hurt profits.

New Upgrades

Acquisitions Aid Revenue Growth at Ensign Group (ENSG)

Per the Zacks analyst, a number of acquisitions of nursing operations and real estate made by the company has expanded its business portfolio, which in turn has driven revenue growth.

Model N (MODN) Rides on Expanding Clientele & Acquisitions

Per Zacks analyst, Model N is benefiting from strong demand of its Revenue Cloud offering. Notably, integration of Revitas acquisition bolstered customer base in life sciences vertical.

Osprey, KoVax Buyouts, Rejensa Launch Aid Phibro (PAHC)

The Zacks analyst is optimistic about Phibro's buyouts of Osprey and KoVax, which are strongly contributing to the top line. Increased adoption of newly-launched Rejensa drive top line growth.

New Downgrades

Dismal Pizza Hut Same-Sores Sales Hurt Yum! Brands (YUM)

Per the Zacks analyst choppy sales trend at Pizza Hut division and outbreak of coronavirus is likely to hurt the company. In fourth-quarter 2019, Pizza Hut same-store sales declined 2%.

Higher Costs & Lower Prices to Hurt International Paper (IP)

Per the Zacks Analyst, International Paper's results will be impacted by higher annual maintenance outage costs, softer prices as well as weaker sales volume.

Persistent Declines in Gross Margin Weigh on ABIOMED (ABMD)

ABIOMED has been witnessing significant drop in gross margin for a couple of quarters now. The Zacks Analyst is also apprehensive of a slashed guidance for fiscal 2020.

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T-Mobile US, Inc. (TMUS) : Free Stock Analysis Report
Philip Morris International Inc. (PM) : Free Stock Analysis Report
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
American Tower Corporation (REIT) (AMT) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Allergan plc (AGN) : Free Stock Analysis Report
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