Tuesday, June 14, 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 Microsoft Corporation (MSFT), Amgen Inc. (AMGN), and Honeywell International Inc. (HON). 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 >>>
Microsoft
shares have held up better than the broader Tech sector in the ongoing market deline (down -19.6% in the year-to-date period vs. -24.2% decline for the Zacks Tech sector), reflecting the company’s entrenched standing in the space. But the stock has nevertheless lagged the broader market as investors reprice the risks associated with a faster growing software player in a rising interest rate environment. Nevertheless, Microsoft’s performance is benefiting from strength in its Azure cloud platform amid accelerated global digital transformation. Teams’ user growth is gaining from continuation of remote work and mainstream adoption of hybrid/flexible work model.
Recovery in advertising and job market boosted LinkedIn and Search revenues. Solid uptake of new Xbox consoles is aiding the gaming segment performance. The company is witnessing growth in user base of its different applications including Microsoft 365 suite, Dynamics and Power Platform. Microsoft expects Surface revenues to grow in the mid-teens range, driven by strong demand for premium devices.
(You can
read the full research report on Microsoft here >>>
)
Amgen
shares have outperformed the Zacks Medical – Biomedical and Genetics industry over the past year (+2.1% vs. -45.5%) on the back of a robust pipeline of early and late-stage assets. Several phase III readouts are due in 2022. Lumakras, a first-in-class lung cancer treatment, is off to an excellent start while its label expansion studies are progressing rapidly. Amgen boasts a strong biosimilars portfolio with potential new products expected to drive long-term growth.
However, pricing and competitive pressure are impacting many of Amgen’s products and franchises. Several of Amgen’s marketed drugs are facing increased pricing headwinds. The IRS tax litigation is an overhang on Amgen shares. Also increasing competition for its legacy products is hurting the sales.
(You can
read the full research report on Amgen here >>>
)
Honeywell
shares have performed better than the peer group as well as the broader market during the ongoing market weakness, which reflects the company’s operating excellence and the favorable outlook for its key end markets.
The Zacks analyst sees the company to benefit from strength in productivity solutions and services, advanced sensing technologies and gas detection businesses. For 2022, the company expects its organic revenues to increase 4-7% year over year. It is likely to gain from acquisitions made over time. Also, the company’s ability to generate strong cash flows adds to its strength. It rewards shareholders handsomely through dividends and share buybacks.
(You can
read the full research report on Honeywell here >>>
)
Other noteworthy reports we are featuring today include Booking Holdings Inc. (BKNG), Chubb Limited (CB), and Stryker Corporation (SYK).
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
Adoption of Cloud & Office 365 Strength Aid Microsoft (MSFT)
Amgen (AMGN) Rapidly Advancing Pipeline Development
Solid Demand Aids Honeywell (HON), Warehouse Automation Ails
Featured Reports
Booking Holdings (BKNG) Banks on Improving Customer Bookings
Per the Zacks analyst, Booking Holdings is benefiting from increasing customer bookings owing to the ongoing vaccination drive and removal of travel restrictions worldwide.
Better Pricing, New Business Growth Drive Chubb Limited (CB)
Per the Zacks analyst, Chubb is set to grow on better pricing, new business growth and high renewal rates. Yet, exposure to cat loss induces underwriting volatility while rising cost pressurize margin
Core MedSurg Unit Aids Stryker (SYK), Pricing Pressure Ails
Per the Zacks analyst, Stryker continues to gain from solid prospects of its core MedSurg arm. However, pricing pressure continues to remain a woe.
TC Energy’s (TRP) C$25B Growth Projects to Boost Earnings
The Zacks analyst believes that TC Energy’s C$25 billion of growth projects should support its earnings and dividend payouts but is worried over the massive debt of C$37 billion.
BCE to Gain From Increased Demand for 5G & Wireless Network
Per the Zacks analyst, BCE will benefit from the increased demand for 5G and wireless network as people are working remotely. Pandemic-induced supply-chain constraints remain concern.
Hershey’s (HSY) Top Line Benefits From Robust Pricing Power
Per the Zacks analyst, Hershey has been benefiting from its pricing power, which is likely to remain strong in 2022. Net price realization drove Hershey’s top line by 6.9 points in the first quarter.
Investment & Expanding Operation Aid American Water (AWK)
Per the Zacks analyst American Water’s planned investment to strengthen infrastructure and expanding operation through acquisition and organic means are going to drive its performance.
New Upgrades
Upbeat Air-Travel Demand Bodes Well for Alaska Air (ALK)
Improved air-travel demand, particularly on the leisure front, is driving Alaska Air Group’s top line. The carrier’s fleet-modernization efforts are encouraging as well.
Strong Demand & Pricing Actions to Drive Greif (GEF)
The Zacks analyst believes that Greif will benefit from strong demand in many of its key markets as well as its pricing actions and restructuring activities.
Pilgrim’s Pride (PPC) Gains From Robust U.S. Operations
Per the Zacks analyst, Pilgrim’s Pride is gaining from higher sales in the U.S. Operations for a while. During first-quarter 2022 sales in the region surged 29.1% year over year.
New Downgrades
Declining Volumes & Transactional Activities Ail eBay (EBAY)
Per the Zacks analyst, weakening momentum in online shopping owing to normalization to pre-pandemic levels, is hurting eBay’s gross merchandise volume and transactional activities on its platform.
Rising Operating Expenses Hurt Invesco’s (IVZ) Profitability
Per the Zacks analyst, elevated costs due to Invesco’s inorganic growth efforts and higher compensation costs will hurt profits. The presence of high levels of goodwill on the balance sheet is a woe.
Softness in Oil & Gas Unit, Project Delays Ail MasTec (MTZ)
Per the Zacks analyst, MasTec has been witnessing significant decline in Oil & Gas segment revenues, and large project timing and regulatory delays.
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