Top Analyst Reports For Home Depot, Boeing & Merck
Zacks Investment Research | Dec 05, 2017 04:58AM ET
Tuesday, December 5, 2017
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 Home Depot (NYSE:HD), Boeing (BA) and Merck (MRK). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Buy-rated Home Depot’s shares have gained +37.9% year to date, compared with the +31.5% gain of the Zacks Retail Building Products industry, backed by its five-year long trend of beating earnings estimates. The company delivered bottom-line beat in third-quarter fiscal 2017, while sales topped estimates for the fifth straight quarter.
Results gained from strength in core business as well as relentless focus on affording innovative products, boosting interconnected customer experience and driving productivity. Steady housing market recovery and strong customer demand also remained tailwinds.
While hurricane-related activities aided comps growth, gross margins on such sales were significantly below average. This led to a decline in gross margin, which is likely to continue in fiscal 2017. Moreover, competition from online retailers may impact performance.
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Shares of Boeing have surged +78.6% over the past year, outperforming the Zacks Aerospace & Defense sector, which gained +39.2% during the same time period. Notably, Boeing is the largest aircraft manufacturer in the world in terms of revenue, orders and deliveries, and one of the largest aerospace and defense contractors.
In this regard, the company’s 20-year market outlook forecasts commercial jetliner demand to increase by 3.6%. Yet, this aerospace company continues to face challenges from order cancellations, stiff competition as well as falling delivery numbers. Furthermore, Boeing’s 787 Dreamliner's deferred production cost remains a cause of concern.
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Merck’s shares have underperformed the Zacks Large Cap Pharmaceuticals industry over the last year, losing -6.8% versus +18.5%, as the company has suffered some notable pipeline setbacks this year. Merck enjoys a diversified business across branded drugs, vaccines and animal health.
Merck has made significant progress with its pipeline and is working on bringing new products to the market. New products like Keytruda and Zepatier should continue to contribute meaningfully to the top line. Keytruda is gaining strong momentum from new indication of first-line lung cancer. The Keytruda development program also significantly advanced this year with several key regulatory approvals.
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Meanwhile, Merck will continue to focus on cost-cutting initiatives to drive the bottom line. However, generic competition for several drugs and pricing pressure will continue to be overhangs on the top line. Rising competition in the immuno-oncology market is also a significant concern.
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Other noteworthy reports we are featuring today include Sinopec (SNP), Allstate (ALL) and Illumina (NASDAQ:ILMN).
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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
Today's Must Read/h6
Featured Reports/h6
The Zacks analyst values Sinopec's discoveries - the Shengli field and Junggar Basin, which will support long-term production
Per the Zacks analyst, a balanced organic and inorganic growth model, a lean and flexible cost structure, and an agile and entrepreneurial management team remain key growth drivers for Amphenol.
Per the Zacks analyst, Big Lots' furniture and soft home categories will continue to drive sales in coming quarters.
Per the Zacks analyst initiatives such as pricing discipline and strong claims management have led to premium growth at both its segments, but high weather related losses hurt margins.
Per the Zacks Analyst, strong fundamentals in the life-science industry has driven demand for Alexandria's properties.
Per the Zacks analyst, Universal Technical's enrollments have been sluggish for several quarters now, which is marring growth prospects.
Per the Zacks analyst, an optimum mix of highly engineered and niche-oriented products is helping Roper to gain market share.
The Zacks analyst values Sinopec's discoveries - the Shengli field and Junggar Basin, which will support long-term production
Per the Zacks analyst, a balanced organic and inorganic growth model, a lean and flexible cost structure, and an agile and entrepreneurial management team remain key growth drivers for Amphenol.
Per the Zacks analyst, Big Lots' furniture and soft home categories will continue to drive sales in coming quarters.
Per the Zacks analyst initiatives such as pricing discipline and strong claims management have led to premium growth at both its segments, but high weather related losses hurt margins.
Per the Zacks Analyst, strong fundamentals in the life-science industry has driven demand for Alexandria's properties.
Per the Zacks analyst, Universal Technical's enrollments have been sluggish for several quarters now, which is marring growth prospects.
Per the Zacks analyst, an optimum mix of highly engineered and niche-oriented products is helping Roper to gain market share.
New Upgrades/h6
The Zacks analyst thinks Newmont should gain from its efforts to boost production performance, de-lever its balance sheet and improve operational efficiency.
The Zacks analyst expects Illumina to maintain its growth momentum on continued uptake of sequencing consumables, instruments and microarray portfolios. Recent strategic pacts should add value.
According to the Zacks analyst, Red Hat is benefiting from strong deal wins, improving recurring revenues and cross-selling of cloud-based technology. Expanding partner base is also positive.
The Zacks analyst thinks Newmont should gain from its efforts to boost production performance, de-lever its balance sheet and improve operational efficiency.
The Zacks analyst expects Illumina to maintain its growth momentum on continued uptake of sequencing consumables, instruments and microarray portfolios. Recent strategic pacts should add value.
According to the Zacks analyst, Red Hat is benefiting from strong deal wins, improving recurring revenues and cross-selling of cloud-based technology. Expanding partner base is also positive.
New Downgrades/h6
Per the Zacks analyst, mounting competition in the semiconductor space and resultant pricing pressure will continue to weigh on Semtech's margins and profitability.
The Zacks analyst is pessimistic about Altice USA's operations in a consumer and technology-driven market, which is highly dependent on rapidly changing businesses and consumer choices.
Per the Zacks analyst, persistent lower comps at Jack in the Box's Qdoba brand is significantly hurting the company's overall sales amid an already challenging restaurant environment.
Per the Zacks analyst, mounting competition in the semiconductor space and resultant pricing pressure will continue to weigh on Semtech's margins and profitability.
The Zacks analyst is pessimistic about Altice USA's operations in a consumer and technology-driven market, which is highly dependent on rapidly changing businesses and consumer choices.
Per the Zacks analyst, persistent lower comps at Jack in the Box's Qdoba brand is significantly hurting the company's overall sales amid an already challenging restaurant environment.
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