Friday, April 8, 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 Costco Wholesale Corporation (COST), AstraZeneca PLC (AZN), and Medtronic plc (MDT). 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 >>>
Shares of
Costco
have outperformed the Zacks Retail – Discount Stores industry over the past year (+69.5% vs. +23.7%), reflecting the company’s growth strategies, better price management, decent membership trend, and increasing penetration of e-commerce business. The strategy to sell products at discounted prices has helped draw customers seeking both value and convenience. These factors have been aiding in registering impressive sales and earnings numbers.
Costco put up a decent performance in second-quarter fiscal 2022, wherein both the top and the bottom lines improved year over year. Also, Costco has been witnessing stellar comps sales run. While the aforementioned factors raise optimism. However, supply chain bottlenecks and higher labor and freight costs remain concerns. Any deleverage in SG&A rate may hurt margins.
(You can
read the full research report on Costco here >>>
)
Shares of
AstraZeneca
have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+47% vs. +38.5%). The Zacks analyst believes that the company’s newer drugs, mainly cancer medicines, Lynparza, Tagrisso and Imfinzi should keep driving revenues. Its pipeline is strong with several phase III data readouts lined up. AstraZeneca has also engaged in external acquisitions and strategic collaborations to boost its pipeline while investing in geographic areas of high growth like emerging markets. Cost-cutting efforts should drive earnings.
The Alexion buyout strengthens its immunology franchise, adding several drugs that can boost its top line. However, AstraZeneca’s diabetes franchise faces stiff competition while pricing pressure is hurting sales in the respiratory unit. Sales of some medicines are being hurt due to COVID-19. Sales are slowing down in key markets, China, due to pricing pressure.
(You can
read the full research report on AstraZeneca here >>>
)
Shares of
Medtronic
have outperformed the Zacks Medical – Products industry over the year-to-date period (+9.3% vs. -7.3%). Medtronic has registered organic growth in the Cardiovascular, Neuroscience and Diabetes segments. The company claims share gains in 60% of its businesses.
However, the sluggish top-line results reflect the unfavorable market impact of COVID-19 and health system labor shortages. CRDN sales decreased in the mid-single digits, given the impact of COVID-19 on PCI procedures. Also, there have been low double-digit organic declines in RGR with sales of ventilators declining in the high-fifties as demand returns to pre-pandemic levels.
(You can
read the full research report on Medtronic here >>>
)
Other noteworthy reports we are featuring today include Equinor ASA (EQNR), Sony Group Corporation (SONY), and Applied Materials, Inc. (AMAT).
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
Decent Comparable Sales Run to Fuel Costco’s (COST) Top Line
Cancer Drugs Aid AstraZeneca (AZN) Sales Amid China Impact
Medtronic’s (MDT) Market Share Grows Despite Forex Headwinds
Featured Reports
Brand Focus to Aid Sony (SONY) Amid G&NS Segment Weakness
While Sony’s focus on premium segment of branded products is helping it gain momentum, declining sales in the Game & Network Services (G&NS) segment is likely to dent margins, per the Zacks analyst.
Applied Materials (AMAT) Rides on Foundry & Logic Spending
Per the Zacks analyst, solid customer spending in foundry and logic which are required in IoT, communications, 5G, automotive, power and sensor applications is benefiting Applied Materials.
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.
Technology, Loans Aid ICICI Bank (IBN), Credit Quality Ails
Per the Zacks analyst, ICICI Bank’s efforts to digitize operations, and steady loan and deposit growth will support profitability. However, worsening credit quality and higher costs are key concerns.
Operating Prowess Aids Waste Management (WM) Amid High Debt
The Zacks Analyst is impressed with Waste Management’s solid operational performance which has helped it strengthen its cash flow position. A debt-heavy balance sheet remains a concern.
Pandemic-Led Strong Demand For PC & Printer Aid HP (HPQ)
Per the Zacks analyst, increased demand for personal computers and printers amid the COVID-19 pandemic-led remote-working and online-learning wave is driving revenue growth for HP.
Revenue Growth, Decline in Costs Aid Molina Healthcare (MOH)
Per the Zacks analyst, Molina Healthcare’s rising revenues can be attributed to strong premium revenues and solid membership growth. Efforts to control costs have been driving its margins.
New Upgrades
Equinor (EQNR) to Benefit From Rising Clean Energy Demand
The Zacks analyst is impressed by Equinor’s massive investments in renewable projects comprising solar and wind energy. This makes it well-poised to capitalize on the rising clean energy demand.
Eni (E) Banks on Renewables, Secures Ample Funding Sources
The Zacks analyst likes Eni since the integrated energy firm is producing energy from renewables increasingly. Also, the company has secured sufficient funding sources to satisfy its financial needs.
WestRock (WRK) Bets on E-Commerce Demand & Acquisitions
Per the Zacks analyst, WestRock will gain on robust e-commerce demand amid the pandemic as well as KapStone and other acquisitions which have boosted its product offerings and geographic presence.
New Downgrades
Weak End-Markets & High Costs to Hurt TriMas (TRS)
The Zacks analyst is concerned that TriMas’ top-line will continue to bear the brunt of weakness in aviation market while inflated material costs will hurt its bottom line performance.
Weather Variation & Cybersecurity Risks Ail Exelon (EXC)
Per the Zacks analyst, Exelon’s ability to provide services can be impacted by extreme weather condition and cybersecurity threats poses risk to Exelon operation and impact its reputation.
COVID Led Supply Chain Issue Impacts Leidos Holdings (LDOS)
Per the Zacks analyst, Leidos might experience delays on certain contracts due to COVID induced supply chain challenges, especially around computer chips, which might impact its operations.
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