Thursday, May 31, 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 3M (MMM), Altria (MO) and Stryker (SYK). 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 >>>
3M’s shares have lost -2.8% in the last year, outperforming the Zacks Diversified Operations industry, which has declined -12.9% over the same period. The Zacks analyst likes 3M's global footprint, diversified product portfolio and the ability to penetrate in different markets.
Portfolio management, investment in innovation and business transformation are the three key levers on which the company intends to focus. 3M raised its earlier guidance for 2018 on strong quarterly results and improved business outlook.
Furthermore, 3M is standardizing its business processes through a new, global ERP system. However, adverse foreign currency fluctuations are likely to negatively impact the earnings in the short-term. 3M is also facing increased pension expenses as its workforce begins to retire. The related extra costs are a drag on the company’s bottom line.
3M further remains susceptible to commodity price risks. Stiff competition from local players in the market remains another significant headwind.
(You can read the full research report on 3M here >>>).
Shares of Altria have outperformed the Zacks Tobacco industry in the last six months (-17.5% vs. -20.1%), aided by expansion in the smokeless products category. Stern government regulations combined with increased health consciousness has been taking a toll on cigarette sales. This has long been hurting Altria’s smokeable segment performance.
Notably, domestic cigarette shipment volumes fell 4.2% year over year during first-quarter 2018, wherein total cigarette retail share declined to 50.3%. Moreover, the FDA’s proposition to lower nicotine in cigarettes to non-addictive or minimally addictive levels is feared to further mar volumes in this category.
However, the Zacks analyst thinks Altria has been progressing well with its reduced-risk products. This fueled its smokeless product revenue in the first quarter, wherein earnings kept its stellar year-over-year growth trend intact. Driven by such positives and gains from lower taxes, management provided a favorable earnings view for 2018.
(You can read the full research report on Altria here >>>).
Stryker’s shares have gained +21% over the last year, outperforming the Zacks Medical Products industry, which has increased +13% over the same period. The company’s high domestic and international growth in revenues buoys optimism. The Zacks analyst thinks continued demand for the Mako Total Knee Platform and a diversified product portfolio have consistently driven the company’s growth.
Strong guidance for the second quarter and full year hold promise. Moreover, surging operating margins reflect the company’s bullish prospects. Stryker’s acquisition-driven strategy is expected to boost growth by expanding existing product offerings across all business segments, while an enhanced international presence should bolster its global hold.
However, supply issues in the Puerto Rico facility and a declining gross margin raise concern. Furthermore, the recall of the Oral Care lineup is a major drawback. The company is currently being plagued by foreign currency volatility and reduced demand for healthcare products.
(You can read the full research report on Stryker here >>>).
Other noteworthy reports we are featuring today include UnitedHealth (UNH), Autodesk (ADSK) and Veeva Systems (VEEV).
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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
Industrial Business to Drive 3M Company's (MMM) Revenues
Altria (MO) to Benefit From Strength in Smokeless Products
Supply Issues Ail Stryker (SYK) Despite Solid Global Foothold
Strong Optum, Increasing Enrollment Aids UnitedHealth (UNH)
Per the Zacks analyst, strong growth in UnitedHealth's Optum unit provides it necessary diversification benefits. Continuous enrollment growth for the past many years has aided its top line.
New Drugs Boost Valeant (VRX), Dermatology Business Lags
Per the Zacks analyst, new drug approvals boost investor sentiment for Valeant as the legacy dermatology business struggles.
Acquisition of Pancreaze Likely to Boost VIVUS' (VVUS) Sales
As per the Zacks analyst, the acquisition of rights to exocrine pancreatic insufficiency drug, Pancreaze from Janssen is likely to boost VIVUS' sales.
Theravance (TBPH) Fights Competition With Vibativ Line Extension
Per the Zacks analyst, Theravance is focused on label expansion of Vibativ to ward off competition in the targeted therapeutic areas.
Renewables Expansion Aid AES Corp. (AES), Huge Debt May Hurt
Per the Zacks analyst, AES Corp.'s rapid expansion of renewable footprint will help it to cut down carbon emissions.
Positive Pricing to Aid AGCO (AGCO), Elevated Expenses a Woe
Per the Zacks analyst, AGCO's margin will gain from positive pricing actions and benefit of productivity initiatives.
Intexon (XON) Boasts Strong Pipeline Amid Competition
Per the Zacks analyst, Intrexon's expanding portfolio of technologies has enabled the company to develop a robust pipeline.
Sinopec (SNP) Gains from New Gas Finds at Sichuan Basin
The Zacks analyst projects that Sinopec's discovery of attractive and economically-viable gas reserves in the Sichuan Basin will support long-term production.
Veeva Systems (VEEV) Gains From Solid Subscription Revenues
Veeva Systems has consistently gained from solid subscription revenue base. The Zacks analyst is bullish about the company's steady efforts to simplify the use of data in the healthcare industry.
Toyota (TM) to Gain from Cost Cut Efforts, Worldwide Sales
Per the Zacks analyst, cost reduction initiatives and expected increase in worldwide sales empowered Toyota to raise its operating income guidance for fiscal 2018.
Business Model Transition, New Hires to Hurt Autodesk (ADSK)
Per the Zacks analyst, Autodesk's growth will continue to be negatively impacted by the ongoing business model transition. Moreover, higher rate of new hires will increase spending.
Republic Services (RSG) Grapples With Pricing Pressure
The Zacks analyst believes that weak landfill pricing due to high cost of landfills and leachate is weighing on Republic Services' margins and earnings.
Higher Costs, Concentration Risk Hurt Raymond James (RJF)
Per the Zacks analyst, rising expenses due to higher compensation costs will hurt Raymond James' profits. Concentration risk arising from significant dependence on U.S. revenues is also a woe.
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Veeva Systems Inc. (VEEV) : Free Stock Analysis Report
UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
Stryker Corporation (SYK) : Free Stock Analysis Report
Altria Group, Inc. (MO) : Free Stock Analysis Report
3M Company (MMM) : Free Stock Analysis Report
Autodesk, Inc. (ADSK) : Free Stock Analysis Report
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