Top Research Reports For Apple, Amgen & United Technologies
Zacks Investment Research | Mar 26, 2019 02:04AM ET
Tuesday, March 26, 2019
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 Apple (AAPL), Amgen (AMGN) and United Technologies (UTX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Apple’s shares have gained +9.2% in the past year and have outperformed the broader market with the S&P 500 increasing +5.5% over the same period. The Zacks analyst thinks Apple is likely to be hurt by weak demand for the iPhone, particularly in China and emerging economies.
The company has failed to penetrate rapidly growing but price sensitive markets of Asia, particularly India. It continues to lose share in the smartphone market due to increasing competition from Chinese handset makers. Nevertheless, the Services segment is expected to grow strongly, driven by solid App Store sales, and increasing adoption of Apple Music and Apple Pay.
Apple's endeavors to open up its ecosystem, through partnerships with the likes of Samsung (KS:005930) and Amazon (NASDAQ:AMZN), are likely to aid the Services segment. The latest announcement of subscription-based video streaming, news and gaming services is a catalyst. The new credit card, supported by Goldman Sachs (NYSE:GS) and Mastercard (NYSE:MA), will benefit from Apple Pay’s growing adoption.
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Shares of Amgen have declined -4.2% year to date, underperforming the Zacks Biomedical and Genetics industry's increase of +8.1%. The Zacks analyst thinks that while Amgen’s newer drugs — Prolia, Xgeva, Blincyto, Kyprolis — will drive sales, its legacy products face biosimilar and brand competition which will create pressure on the top line in 2019.
Meanwhile, uptake of key drug, Repatha has been slow due to payer restrictions. The recent price cut will hurt sales going forward. However, Amgen is progressing well with its pipeline and the approval of Aimovig was a huge boost. In the past five years, Amgen has launched nine products, including two in new therapeutic areas.
Amgen boasts a strong biosimilars pipeline, which could be an important long-term growth driver for the company. Amgen’s restructuring plan is making it leaner and more cost efficient. Lower taxes and share buybacks should provide some support to the bottom line.
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United Technologies’ shares have lost -10.2% in the past six months, underperforming the Zacks Diversified Operations industry, which has declined -4.6% over the same period. The Zacks analyst thinks strength in commercial and military aftermarket businesses and impressive contribution from last year’s acquisition Rockwell Collins’ sales will likely boost United Technologies' near-term revenues.
Also, improved top line and cost-cutting measures are expected to enhance profitability, going forward. Backed by these positives, the company has given bullish full-year 2019 revenue guidance. The company intends to become more competent on the back of meaningful business acquisitions.
Notably, the Rockwell Collins (NYSE:COL) buyout is likely to boost sales in 2019. Rising costs of sales remain a threat to the company's gross margin. If unchecked, higher costs and operating expenses will prove detrimental to United Technologies' margins and profitability. Moreover, increases in debt level can increase its financial obligations.
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Other noteworthy reports we are featuring today include Travelers Companies (TRV), Red Hat (RHT) and Xilinx (NASDAQ:XLNX).
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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
According to the Zacks analyst, Red Hat is benefiting from strong deal win, improving recurring revenues, cross-selling of cloud-based technology and expanding customer base.
Per the Zacks analyst, Interactive Brokers' focus on developing of proprietary software have resulted in increase in revenues and daily average revenue trades (DARTs).
The Zacks analyst likes the growth in parcel volumes. Parcel volumes increased 37.1% in 2018. High operating expenses are, however, a concern.
The Zacks analyst likes the company's growth-by-acquisition policy. Efforts to reward shareholders are also impressive.
The Zacks analyst is encouraged by Extended Stay's continual expansion endeavors and the company's pipeline growth in the past year.
Per the Zacks analyst Covanta's strategic acquisitions and investments to expand its organic operations are assisting growth.
Per the Zacks analyst, Infinity is focussed on the develoment of its lead pipeline candidate-IPI-549 despite stiff competition.
According to the Zacks analyst, Red Hat is benefiting from strong deal win, improving recurring revenues, cross-selling of cloud-based technology and expanding customer base.
Per the Zacks analyst, Interactive Brokers' focus on developing of proprietary software have resulted in increase in revenues and daily average revenue trades (DARTs).
The Zacks analyst likes the growth in parcel volumes. Parcel volumes increased 37.1% in 2018. High operating expenses are, however, a concern.
The Zacks analyst likes the company's growth-by-acquisition policy. Efforts to reward shareholders are also impressive.
The Zacks analyst is encouraged by Extended Stay's continual expansion endeavors and the company's pipeline growth in the past year.
Per the Zacks analyst Covanta's strategic acquisitions and investments to expand its organic operations are assisting growth.
Per the Zacks analyst, Infinity is focussed on the develoment of its lead pipeline candidate-IPI-549 despite stiff competition.
New Upgrades/h6
Per the Zacks analyst, Travelers is set to grow on strong market position, economies of scale, compelling product portfolio, solid underwriting, strategic alliances and effective capital deployment.
The Zacks analyst expects Yum! Brands' digital initiatives to drive growth. Further, by refranchising and efficient cost structure, the company is facilitating earnings growth.
The Zacks analyst believes that Cabot's large acreage holdings in the fast-growing Marcellus Shale will enable the company to deliver strong natural gas production growth.
Per the Zacks analyst, Travelers is set to grow on strong market position, economies of scale, compelling product portfolio, solid underwriting, strategic alliances and effective capital deployment.
The Zacks analyst expects Yum! Brands' digital initiatives to drive growth. Further, by refranchising and efficient cost structure, the company is facilitating earnings growth.
The Zacks analyst believes that Cabot's large acreage holdings in the fast-growing Marcellus Shale will enable the company to deliver strong natural gas production growth.
New Downgrades/h6
Per the Zacks analyst, Xilinx is hurt by rising operating expenses due to higher employee compensation and the full integration of the DeePhi buyout. Stiff competition from Intel (NASDAQ:INTC) is another concern.
The Zacks analyst is worried about Paychex's rising expenses incurred to fund growth of PEO business and higher compensation-related costs and acquisitions.
Per the Zacks analyst, TD Ameritrade's bottom-line remains under pressure due to continued rise in operating expenses due to the company's investments in technology and advice and guidance offerings.
Per the Zacks analyst, Xilinx is hurt by rising operating expenses due to higher employee compensation and the full integration of the DeePhi buyout. Stiff competition from Intel (NASDAQ:INTC) is another concern.
The Zacks analyst is worried about Paychex's rising expenses incurred to fund growth of PEO business and higher compensation-related costs and acquisitions.
Per the Zacks analyst, TD Ameritrade's bottom-line remains under pressure due to continued rise in operating expenses due to the company's investments in technology and advice and guidance offerings.
Zacks Investment Research
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