Top Analyst Reports For Merck, Abbott & Lockheed Martin
Zacks Investment Research | Dec 28, 2018 01:49AM ET
Friday, December 28, 2018
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 Merck (MRK), Abbott (ABT) and Lockheed Martin (LMT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Buy-ranked Merck’s shares have gained +33.9% year to date, significantly outperforming the Zacks Large Cap Pharmaceuticals industry, which has gained +2.8% over the same period. The Zacks analyst emphasizes that Merck’s new products like Keytruda, Lynparza, and Bridion are contributing meaningfully to the top line.
Keytruda sales are gaining momentum with approval for additional indications, especially in the first-line lung cancer setting as it is the only anti-PD-1 approved in this setting. Animal health and vaccine products are also performing strongly and remain core growth drivers for Merck. 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 competitive pressure on the diabetes franchise and on products like Isentress (HIV), Zepatier (HCV) and Zostavax (vaccine) remains.
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Shares of Abbott have lost -4.7% over the past three months, outperforming the Zacks Medical Products industry, which has declined -14.2% over the same period. Increasing currency headwinds to some extent dented the company’s strong international performance in the last reported quarter. Meanwhile, emerging market performance has been promising.
The Zacks analyst is optimistic about the strong and consistent performance by the company’s EPD and Medical Devices segments. The company has been hogging the limelight within Diabetic Care on growth with FreeStyle Libre. Within Structural Heart, worldwide strong uptake of MitraClip improves further following the FDA approval of its upgraded version.
This apart, synergies from Alere consolidation in the form of revenues from Rapid Diagnostics have been driving growth. On the flip side, sluggish Vascular arm continues to dent growth.
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Buy-ranked Lockheed Martin’s shares have lost -19.1% over the past one year, underperforming the Zacks Aerospace Defense sector, which has declined -9.1% over the same period. The Zacks analyst emphasizes that Lockheed Martin, being the largest defense contractor in the world, enjoys a strong demand for its high-end military equipment in domestic as well as international markets.
Consequently, strong order growth has been a primary growth driver for this company. Lately, the company has been witnessing strong demand for its equipment, ranging from C-130J aircraft in France and Germany to helicopters in Poland to missile defense systems in the Asia-Pacific, Europe, and Middle East regions.
Its backlog climbed to a record $109 billion, in the third quarter. However, it faces intense competition for its broad portfolio of products and services in both domestic and international markets.
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Other noteworthy reports we are featuring today include General Dynamics (GD), United Parcel Service (NYSE:UPS) and Bank of New York Mellon (NYSE:BK).
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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
Today's Must Read/h6
Featured Reports/h6
Per the Zacks analyst, strategic acquisitions will help the company to maintain steady growth momentum and drive future results. However, rising interest rates are likely to hurt its growth prospects.
Per the Zacks analyst, Travelers is poised to benefit from compelling product portfolio, prudent pricing and strong market position aiding underwriting gains.
Per the Zacks analyst, strong traction of Cintas' Uniform Rental & Facility Services segment, fueled by increasing penetration levels at existing customers should continue to drive its revenues.
Expansion in international markets is a key aspect of lululemon's long-term growth strategy. The company has currently identified significant expansion opportunities in Europe and Asia.
The Zacks analyst believes that Darden's focus on menu innovation in all its brands as well as other sales building efforts will continue to boost top line growth.
The Zacks analyst appreciates the growth in cargo and passenger revenues at LATAM Airlines.
Per the Zacks analyst, Cosan will gain from its acquisitions and its supply and commercialization strategy.
Per the Zacks analyst, strategic acquisitions will help the company to maintain steady growth momentum and drive future results. However, rising interest rates are likely to hurt its growth prospects.
Per the Zacks analyst, Travelers is poised to benefit from compelling product portfolio, prudent pricing and strong market position aiding underwriting gains.
Per the Zacks analyst, strong traction of Cintas' Uniform Rental & Facility Services segment, fueled by increasing penetration levels at existing customers should continue to drive its revenues.
Expansion in international markets is a key aspect of lululemon's long-term growth strategy. The company has currently identified significant expansion opportunities in Europe and Asia.
The Zacks analyst believes that Darden's focus on menu innovation in all its brands as well as other sales building efforts will continue to boost top line growth.
The Zacks analyst appreciates the growth in cargo and passenger revenues at LATAM Airlines.
Per the Zacks analyst, Cosan will gain from its acquisitions and its supply and commercialization strategy.
New Upgrades/h6
Per the Zacks analyst, Nektar has collaborations with large pharma companies which provide significant amount in fees and a robust pipeline. However, the company relies on partners for revenues.
The Zacks analyst is impressed by the company's measures to reward shareholders through dividends and share buybacks. Consistent improvement in operating ratio is another positive.
Per the Zacks analyst, growing number of blockbuster titles benefit IMAX. Additionally, higher contribution from Greater China bodes well for top-line growth.
Per the Zacks analyst, Nektar has collaborations with large pharma companies which provide significant amount in fees and a robust pipeline. However, the company relies on partners for revenues.
The Zacks analyst is impressed by the company's measures to reward shareholders through dividends and share buybacks. Consistent improvement in operating ratio is another positive.
Per the Zacks analyst, growing number of blockbuster titles benefit IMAX. Additionally, higher contribution from Greater China bodes well for top-line growth.
New Downgrades/h6
The Zacks analyst is concerned about high operating expenses at UPS. High capital expenses are pushing up costs. Trade disputes between China and the United States are also a concern.
Per the Zacks analyst, elevated operating expenses, mainly due to investment-related costs, and litigation and restructuring charges along with dependence on fee-based income hurt BNY Mellon's growth.
Per the Zacks analyst, Leidos Holdings is susceptible to interest rate risk related to debt issuance. Leidos faces intense competition for its portfolio of products and services.
The Zacks analyst is concerned about high operating expenses at UPS. High capital expenses are pushing up costs. Trade disputes between China and the United States are also a concern.
Per the Zacks analyst, elevated operating expenses, mainly due to investment-related costs, and litigation and restructuring charges along with dependence on fee-based income hurt BNY Mellon's growth.
Per the Zacks analyst, Leidos Holdings is susceptible to interest rate risk related to debt issuance. Leidos faces intense competition for its portfolio of products and services.
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