Wednesday, May 25, 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 Johnson & Johnson (JNJ), The Walt Disney Co. (DIS) and NextEra Energy, Inc. (NEE). 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 >>>
Johnson & Johnson
shares have gained +10.0% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +25.0%. The Zacks analyst believes that the company’s diversified busniess makes it relatively resilient amid macroeconomic turmoil.
Its Pharma unit is performing at above-market levels, supported by its blockbuster drugs Darzalex and Stelara, and contribution from newer drugs, Erleada and Tremfya. Sales in the MedTech unit recovered in Q1 and the company is focusing on growing this business through new products.
However, sales in the Consumer segment are being hurt by external supply constraints. J&J is making rapid progress with its pipeline and line extensions. Several pivotal data readouts are expected in 2022.
Headwinds like generic competition and pricing pressure continue. Though J&J has taken meaningful steps to resolve its talc and opioid litigation, they remain an overhang on the stock.
(You can
read the full research report on Johnson & Johnson here >>>
)
Walt Disney
shares have declined -42.1% over the past year against the Zacks Media Conglomerates industry’s decline of -43.1%. The Zacks analyst believes that the company’s profitability is expected to be negatively impacted by higher investments in content, which will drive up programming and production costs at Media and Entertainment Distribution.
Closure of its Asian theme park due to COVID-19 doesn’t bode well for the Parks, Experiences and Products top-line growth. Disney expects this to reduce operating income by up to $350 million in the fiscal third quarter. Disney’s leveraged balance sheet is a concern.
However, the company benefits from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering. Availability in the Nordics, Latin America and other Asian territories is helping it in expanding user base. Revival in Parks, Experiences and Products businesses also hold promise in the long haul.
(You can
read the full research report on Walt Disney here >>>
)
NextEra Energy
shares have gained +3.1% over the past year against the Zacks Utility – Electric Power industry’s gain of +12.8%. The Zacks analyst believes that, through proper execution of organic projects and strategic acquisitions, the company is expanding its operations and efficiently serving more customers. NextEra Energy currently has a lot of renewable projects in its backlog and the number is rising every quarter, which is aiding NextEra to cut emissions.
The merger of Gulf Power and FPL strengthens NextEra Energy’s position in Florida. An improving Florida economy and FPL’s reliable services is expanding its customer volume in every quarter.
NextEra Energy has ample liquidity to meet its near-term debt obligations. However, the nature of its business is subject to complex federal, state and other regulations. Unfavorable weather conditions and an increase in supply costs adversely impact earnings.
(You can
read the full research report on NextEra here >>>
)
Other noteworthy reports we are featuring today include The Home Depot, Inc. (HD), AstraZeneca PLC (AZN), and Anthem, Inc. (ANTM).
Mark Vickery
Senior Editor
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
J&J (JNJ) Boasts a Solid Pipeline
Disney (DIS) Banks on Disney+ Growth & Reopening of Parks
Steady Investment & Renewable Focus Aid NextEra Energy (NEE)
Featured Reports
Focus on Pro Customers to Aid Home Depot’s (HD) Top Line
Per the Zacks analyst, Home Depot’s Pro segment has been a key driver of sales growth for several quarters. It is on track with investments to build a Pro ecosystem. Pro sales outpaced DIY sales in Q1
Cancer Drugs Push AstraZeneca’s (AZN) Sales, Pipeline Solid
The Zacks analyst says that AstraZeneca’s cancer drugs, Lynparza, Tagrisso and Imfinzi, should keep driving revenues. Its pipeline is strong with several phase III data readouts lined up.
Anthem (ANTM) Rides on Solid Top Line & Capital Position
Per the Zacks Analyst, Anthem’s strong premiums, rise in membership and strategic initiatives have contributed to top-line growth. Moreover, its robust capital position remains a key catalyst.
Republic Services (RSG) Benefits From Acquisitions, Debt Ails
Republic Services’ (RSG) top line benefits from the favorable impact of acquisitions and internal growth. The Zacks analyst is, however, worried about its debt-laden balance sheet.
Robust Sensor Unit Drives DexCom (DXCM), Higher Costs a Woe
Per the Zacks analyst, DexCom has been gaining consistently from the Sensor and Transmitter segments. However, increase in operating expenses continues to raise concern.
Acquisitions Support Regions Financial (RF), High Costs Ail
Per Zacks analyst, Regions’ solid liquidity position allows it to grow through acquisitions. Yet, persistently rising costs due to investment in technology might limit bottom line growth in near term.
Strong Portfolio & Acquisitions to Drive PTC’s Performance
Per the Zacks analyst, PTC’s performance is being driven by robust demand for products like Creo and Windchill. Strategic acquisitions have played a pivotal part in boosting the company’s business.
New Upgrades
Watsco (WSO) Benefits From Customer-Focused Technologies
Per the Zacks analyst, Watsco has been benefiting from regular investments in customer-focused technologies and the expansion of its branch network.
Meritage Homes (MTH) Banks on Strong Housing Demand, Pricing
Per the Zacks analyst, Meritage Homes has been gaining from higher demand arising from the low supply of new and resale housing inventory. Also, solid pricing are adding to the bliss.
Delek (DK) to Gain from Strong Refining Margins
The Zacks analyst believes that a marked improvement in oil products consumption, plus rising refining profitability, will drive Delek’s earnings and cash flows going forward.
New Downgrades
Pandemic-led Supply Constraints Ail Applied Materials (AMAT)
Per the Zacks analyst, shortages of silicon components and other certain parts as a result of pandemic-induced supply chain disruptions are hurting Applied Materials.
Forex Volatility, High Debt Concern Manulife Financial (MFC)
Per the Zacks analyst, Manulife Financial has been witnessing increase in financial leverage over the last few years. Foreign exchange volatility raises financial risk.
Chip Crunch and Escalating Expenses to Hurt Magna (MGA)
The Zacks Analyst is concerned about Magna’s volumes being affected by the global chip crunch. Cost inflation of metals and soaring R&D expenses are likely to weigh on the firm’s margins.
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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