Friday, September 11, 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 Facebook (FB), McDonalds (MCD) and Bristol-Myers Squibb (BMY). 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 >>>
Facebook shares have outperformed the S&P 500 in the year-to-date period (+30.6% vs. +3.8%) on the back of steady user growth across all regions, particularly the Asia Pacific region.
The coronavirus-led lockdowns and shelter-at-place guidelines have increased engagement of its products like Instagram, WhatsApp, Messenger and Facebook Watch. However, Facebook expects user-base growth to be flat or slightly down in most of its regions in the third quarter of 2020, sequentially. The company expects ad-revenue growth on a year-over-year basis to be roughly 10%.
Facebook assumes some of the recent surge in community engagement to normalize as regions reopen. Further, a number of companies have announced plans to freeze ad spending on Facebook due to its failure to eradicate hate speech and misinformation. This is expected to hurt top-line growth, at least in the near term.
(You can read the full research report on Facebook here >>>)
Shares of McDonalds have gained +27.7% over the past six months against the Zacks Restaurants industry’s rise of +35.4%. The Zacks analyst believes that the company is benefiting from an increase in drive-thru sales.
McDonald’s increased focus on delivery and accelerated deployment of EOTF restaurants in the United States is commendable. Additionally, the company is making every effort to drive growth in international markets as well. Of late, earning estimates for 2020 have increased.
The company witnessed continued improvement in results throughout the second quarter. However, dismal comps and high debt is hurting the company. The company’s comps declined for the second straight quarter after reporting positive comps in the preceding 19 quarters. Moreover, the company is witnessing dismal traffic due to the pandemic.
(You can read the full research report on McDonalds here >>>)
Bristol-Myers shares have gained +17.5% over the past year against the Zacks Large Cap Pharmaceuticals industry’s rise of +9.3%. The Zacks analyst believes that Bristol-Myers’ blockbuster immuno-oncology drug, Opdivo, and blood thinner drug, Eliquis, will drive growth for the company.
Eliquis is the leading oral anti-coagulant drug and the company continues to witness growth in both Eliquis brand and the market. The label expansion of Opdivo for first-line NSCLC should boost prospects. The addition of sales from Celgene’s drugs (acquired in November 2019) has boosted growth prospects. In particular, the addition of Revlimid has strengthened the oncology portfolio.
The company lifted its earnings guidance for 2020 in hope of a possible recovery in the second half of 2020. Shares have outperformed the industry in the past year. However, Opdivo’s performance was dismal as it faces stiff competition from Keytruda and Tecentriq. Moreover, concerns will rise once Revlimid loses patent protection.
(You can read the full research report on Bristol-Myers here >>>)
Other noteworthy reports we are featuring today include Netflix (NFLX), Royal Dutch Shell (RDS.A) and U.S. Bancorp (USB).
5 Stocks Set to Double
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Today, See These 5 Potential Home Runs >>
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
Featured Reports
Robust Content Aids Netflix (NFLX) Amid Stiff Competition
Per the Zacks analyst, Netflix’s robust content portfolio is driving subscriber addition amid competition from Disney+, Apple TV+ and Amazon prime video.
Royal Dutch Shell (RDS.A) to Gain from Growing LNG Demand
The Zacks analyst believes that Shell’s position as a major supplier of liquefied natural gas should help it benefit its long-term cash flow growth on the back of attractive growth opportunities.
Revenue Growth Supports U.S. Bancorp (USB), High Costs A Woe
Per the Zacks analyst, organic growth backed by rise in average loans and deposits remain a key strength at U.S. Bancorp.
Debt Reductions, Randgold Acquisition Aid Barrick (GOLD)
According to the Zacks analyst, Barrick is well placed to benefit from its actions to de-leverage its balance sheet and synergies from the Randgold acquisition.
Strategic Acquisitions Aid Humana (HUM), High Costs Hurt
Per the Zacks Analyst, buyouts have helped the company to expand business and achieve long-term growth.
Investments Aids Sempra Energy (SRE), Operational Risks Hurt
Per the Zacks analyst, Sempra’s disciplined investments in various projects bolster growth prospects.
High Demand for SUVs & Future EV Lineup to Buoy Ford (F)
The Zacks analyst is optimistic about the rising demand for Ford’s F-series trucks and SUV models. Impressive future lineup of electric vehicles is likely to boost the firm’s top line, going forward.
New Upgrades
RLI Corp (RLI) Poised for Growth on Solid Underwriting
Per the Zacks analyst, RLI Corp is set to grow on diversified and compelling product portfolio, focus on introducing new products, prudent re-underwriting, business expansion, and rate increase.
Sturdy Comps Run to Fuel Grocery Outlet’s (GO) Top Line
Per the Zacks analyst, Grocery Outlet’s opportunistic purchasing, marketing efforts and new product offerings facilitate comparable-store sales growth.
Groupon (GRPN) Banks on Restructuring Efforts & Partnerships
Per the Zacks analyst, Groupon’s restructuring efforts, strategic partnerships along with ongoing brand awareness programs will aid revenues.
New Downgrades
Sinopec’s (SNP) Weak Refining & Upstream Operations to Hurt
The Zacks analyst expects lower energy demand owing to the coronavirus pandemic to hurt Sinopec’s refining businesses. Moreover, the firm’s weak upstream operation is concerning.
Adverse Timing of Unearned Revenue Hurts National Vision (EYE)
The Zacks analyst is concerned about the ongoing slash in National Vision’s net revenue and profitability due to the unfavorable timing of unearned revenue and pandemic-led temporary store closures.
High Costs & Debt Likely to Hurt Papa John’s (PZZA)
Per the Zacks analyst, high costs associated with product launches, marketing campaigns, and other sales-building initiatives likely to hurt margin.
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