Wednesday, June 29, 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 Meta Platforms, Inc. (META), Eli Lilly and Company (LLY), and The Home Depot, Inc. (HD). 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 >>>
Meta Platforms
shares have held up better relative to the Zacsk Internet Services industry over the past year (down -53.8% vs. -64.0% for the industry), but it has lagged the broader market in a major way (down -53.8% vs. -11.6% for the S&P 500 index).
In addition to market wide sentiment shift about the Tech sector in general in the current rising interest rate environment, Meta is suffering from Apple’s iOS changes as well as engagement-related headwinds. Apple’s iOS changes have made ad targeting difficult, which, in turn, has increased the cost of driving outcomes. Measuring these outcomes has also become difficult. Meta expects these factors to hurt advertising revenue growth in throughout 2022. Meta’s second-quarter guidance reflects macroeconomic and forex concerns.
Cost inflation and supply chain disruptions are expected to impact advertiser budgets. However, Meta is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its products like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.
(You can
read the full research report on Meta Platforms here >>>
)
Eli Lilly
shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+40.4% vs. +19.8%), reflecting the the company’s solid portfolio of core drugs in diabetes, autoimmune diseases and cancer. The Zacks analyst believes that Lilly’s revenue growth is being driven by higher demand for drugs like Trulicity, Taltz, and others. It is regularly adding promising new pipeline assets through business development deals.
It has an exciting pipeline of potential new medicines including tirzepatide for type II diabetes and donanemab for early Alzheimer’s disease. Both candidates have multibillion dollar sales potential. However, generic competition for several drugs, rising pricing pressure in the United States mainly on key drug, Trulicity, and price cuts in some international markets like China, Japan and Europe are some top-line headwinds.
(You can
read the full research report on Eli Lilly here >>>
)
Home Depot
shares have declined -13.4% over the past year against Zacks Building Products – Retail industry’s decline of -11.2% and the S&P 500 index’s -11.6% decline. The company reported soft gross margin in the fiscal first quarter driven by higher cost of goods sold. Supply chain headwinds also marred results to some extent. Nevertheless, Home Depot boasts a robust surprise trend, which continued in first-quarter fiscal 2022. Results gained from strong demand for home-improvement projects, robust housing market trends and ongoing investments.
The company also benefited from continued strength in both Pro and DIY categories as well as digital momentum. Its interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters, aiding digital sales.
(You can
read the full research report on Hemo Depot here >>>
)
Other noteworthy reports we are featuring today include Merck & Co., Inc. (MRK), The Boeing Company (BA), and Vale S.A. (VALE).
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
User Growth, Instagram Strength Aids Meta Platforms (META)
Lilly (LLY) Boosts Pipeline with Collaboration Deals
Focus on Pro Customers to Aid Home Depot’s (HD) Top Line
Featured Reports
Keytruda to Remain Merck’s (MRK) Key op Line Driver in 2022
With continued label expansion into new indications & early-stage settings, Keytruda is expected to remain a key top-line driver, per the Zacks analyst.
Military Business Aids Boeing (BA), Supply Chain Issue Woes
Per the Zacks analyst, Boeing boasts $2.6 trillion market opportunity for defense and space, which would bolster its growth. Ye, COVID induced supply chain shortages might hurt the stock’s results.
Permian Basin Focus, Cost Management Aid Occidental (OXY)
Per the Zacks analyst Occidental’s acquisition of Anadarko expanded its operation in resource rich Permian Basin and efficient cost management will drive its performance over the long run.
Senior Housing Recovery & Acquisitions Aids Welltower (WELL)
Per the Zacks Analyst, Welltower (WELL) is set to gain from the senior housing recovery and strategic acquisitions. However, earnings dilution in the near term from asset dispositions is a woe.
Buyouts, Higher Fees & Commissions Aid Arthur J. Gallagher (AJG)
Per the Zacks analyst, a number of acquisitions have helped Arthur J. Gallagher to enhance its capabilities and drive growth. Also, improving fees and commissions should drive organic revenue growth.
AMN Healthcare (AMN) Continues to Gain From Healthcare MSP
The Zacks analyst is upbeat about AMN Healthcare’s unique MSP program resulting in a large network of improved patient care and improved efficiency despite its operation in a stiff competitive space.
FactSet (FDS) Rides on Client Retention Amid Competition
The Zacks analyst is impressed with growth in FactSet’s annual subscription value, driven by client additions. However, stiff competition will put FactSet under pricing pressure and hurt its top line.
New Upgrades
Rising Iron Prices & Solid Demand to Drive Vale (VALE)
Per the Zacks analyst, rising iron ore prices and demand, lower debt levels and focus on improving productivity and lowering costs will drive growth for Vale.
New Features & Security Focus Drives Twitter’s (TWTR) Growth
Twitter adds new features and ramps up its security efforts to lower abuse, which per the Zacks analyst is boosting user growth.
Solid Housing, Repair & Remodeling Activity Aid Mohawk (MHK)
Per the Zacks analyst, Mohawk’s business benefits from strong housing demand and repair and remodelling activities. Also, acquisition strategy and strong international presence bode well.
New Downgrades
PetroChina (PTR) Hurt by Limited International Presence
The Zacks analyst is worried about PetroChina’s limited progress in expanding its exposure to international regions and reduce dependence on mature domestic areas.n
Ongoing Supply Chain Troubles to Hurt Western Digital (WDC)
Per the Zacks analyst, pandemic induced global supply chain troubles and component shortages is a major concern for Western Digital. Stiff competition and a high debt load are other concerns.
B&G Foods’ (BGS) Margins Troubled by Input Cost Inflation
Per the Zacks analyst, B&G Foods has been grappling with input cost inflation. In 2022, management expects to keep seeing cost inflation for inputs, like ingredients, packaging and transportation.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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