Top Research Reports For Mastercard, VMware & Sanofi
Zacks Investment Research | Jun 05, 2018 11:53PM ET
Wednesday, June 6, 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 Mastercard (MA), VMware (VMW) and Sanofi (PA:SASY) (SNY). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Strong-Buy ranked Mastercard’s shares have increased 59.3% over the last year, significantly outperforming the Zacks Financial Transaction Services industry’s gain of 36.3% during the same period. The Zacks analyst thinks the company is well placed for growth, given its solid market position, ongoing expansion and digital initiatives plus significant opportunities from the secular shift toward electronic payments.
The buyouts of VocaLink and NuData Security complement the company’s efforts to participate in new payment flows and enhance its safety and security offerings. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised upward over the last 60 days. However, escalating costs continue to bother. Also, higher incentives and rewards will put pressure on its bottom line.
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Shares of Buy-ranked VMware have gained +17.7% year to date, outperforming the Zacks Software industry which is up +16.9% over the same period. VMware reported impressive first-quarter fiscal 2019 results. Both earnings and revenues increased on a year-over-year basis. Strong top-line growth was primarily driven by robust performance from NSX and vSAN product line. Management provided strong guidance for fiscal 2019.
The Zacks analyst likes the fact that VMware has been consistently taking initiatives to diversify its product portfolio to include most of the IT infrastructure. The company’s dominance in SDDC along with expanding customer base in cloud driven by partnerships with the likes of IBM (NYSE:IBM) and AWS is positive.
Moreover, continuing enterprise deal wins will drive growth in the long haul. However, heavy spending on R&D may weigh on its margins. Intensifying competition is also a concern.
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Sanofi’s shares have underperformed the Zacks Large Cap Pharmaceuticals industry year to date, declining -10.6% vs. -4.5%. Sanofi has several new products in its portfolio and candidates in its pipeline that can contribute to long-term growth.
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The Zacks analyst is particularly optimistic about sales prospects of Dupixent, which could prove to be an important growth driver. The acquisitions of Ablynx and Bioverativ have strengthened Sanofi’s position in the rare blood disorders market. However, Sanofi’s Diabetes franchise is under significant pressure with key product, Lantus facing increasing competitive pressure at the payor level and the presence of biosimilar competition in several European markets and Japan.
Other headwinds include generic competition for many drugs and slower-than-expected uptake of new products like Praluent. Meanwhile, the performance of the Vaccines and Consumer Healthcare franchises has been soft lately. Nonetheless, Sanofi expects to return to growth in the second half of 2018.
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Other noteworthy reports we are featuring today include Twitter (TWTR), Workday (WDAY) and State Street (STT).
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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
Per the Zacks analyst, Twitter's video initiatives are boosting user growth rate and engagement levels. This is helping it to attract advertisers, which is driving top-line growth.
Per the Zacks analyst, Workday's revenue growth continues to be driven by high demand for its HCM and financial management solutions. Also, its diversified product portfolio is a positive.
Per the Zacks analyst, new business wins, synergies from GE Asset Management (GEAM) deal and rise in interest rates will aid State Street. However, mounting expenses remain a major near-term concern.
Per the Zacks analyst, CIT Group's restructuring initiatives with an aim to become a leading national middle-market bank are commendable. Yet, worsening asset quality & rising expenses are concerns.
Per the Zacks analyst, while Continental is set to thrive from its oil-rich resources in Bakken Shale play, high debt burden and rising production expenses will hurt its growth.
The Zacks analyst likes the company's initiatives to reward its shareholders through dividend payments. Efforts to grow its fleet are also encouraging.
DENTSPLY is likely to gain from CAD/CAM systems, imaging systems and orthodontic platforms.
Per the Zacks analyst, Twitter's video initiatives are boosting user growth rate and engagement levels. This is helping it to attract advertisers, which is driving top-line growth.
Per the Zacks analyst, Workday's revenue growth continues to be driven by high demand for its HCM and financial management solutions. Also, its diversified product portfolio is a positive.
Per the Zacks analyst, new business wins, synergies from GE Asset Management (GEAM) deal and rise in interest rates will aid State Street. However, mounting expenses remain a major near-term concern.
Per the Zacks analyst, CIT Group's restructuring initiatives with an aim to become a leading national middle-market bank are commendable. Yet, worsening asset quality & rising expenses are concerns.
Per the Zacks analyst, while Continental is set to thrive from its oil-rich resources in Bakken Shale play, high debt burden and rising production expenses will hurt its growth.
The Zacks analyst likes the company's initiatives to reward its shareholders through dividend payments. Efforts to grow its fleet are also encouraging.
DENTSPLY is likely to gain from CAD/CAM systems, imaging systems and orthodontic platforms.
New Upgrades/h6
The Zacks analyst believes Murphy Oil's ongoing investment to develop and produce oil from low cost assets will boost its production and performance.
Per the Zacks analyst, Ingersoll is focusing on improving the efficiencies and capabilities of products and services within its core businesses to boost margins and drive net asset value.
Per the Zacks analyst, Ralph Lauren is expanding in underpenetrated markets with its highly productive new small-format stores. It targets generating $0.5 billion of sales from China in five years.
The Zacks analyst believes Murphy Oil's ongoing investment to develop and produce oil from low cost assets will boost its production and performance.
Per the Zacks analyst, Ingersoll is focusing on improving the efficiencies and capabilities of products and services within its core businesses to boost margins and drive net asset value.
Per the Zacks analyst, Ralph Lauren is expanding in underpenetrated markets with its highly productive new small-format stores. It targets generating $0.5 billion of sales from China in five years.
New Downgrades/h6
Per the Zacks analyst, Itron's margin performance will be hurt by industry supply chain headwinds and pricing issues. Elevated expense due to restructuring activities also remains a woe.
Per the Zacks analyst, profitability of Winnebago's Motorized business segment is under pressure due to manufacturing investments such as facilities at Junction City and Forest City.
Per the Zacks analyst, rising expenses, mainly due to higher benefits and a change in reserves for future benefits plus interest and debt expense, will continue to restrict Unum's margin expansion.
Per the Zacks analyst, Itron's margin performance will be hurt by industry supply chain headwinds and pricing issues. Elevated expense due to restructuring activities also remains a woe.
Per the Zacks analyst, profitability of Winnebago's Motorized business segment is under pressure due to manufacturing investments such as facilities at Junction City and Forest City.
Per the Zacks analyst, rising expenses, mainly due to higher benefits and a change in reserves for future benefits plus interest and debt expense, will continue to restrict Unum's margin expansion.
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