Top Research Reports For Toyota, Netflix & AbbVie
Zacks Investment Research | Nov 11, 2019 01:50AM ET
Monday, November 11, 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 Toyota Motor (TM), Netflix (NASDAQ:NFLX) (NFLX) and AbbVie (ABBV). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Toyota’s shares have outperformed the Zacks Foreign Automotive industry year to date (24.4% vs. 15.2%). The Zacks analyst believes that Expanding portfolio of product lines is driving the firm’s sales.
In order to capitalize on the accelerated global shift to electric cars, the auto giant of Japan is deepening focus on developing electric and autonomous vehicles, which will bolster the company’s product competitiveness. Its healthy balance sheet, improving cash flows and investor-friendly moves are other positives.
However, anticipating a slowdown in India, Indonesia and Thailand, the company narrowed its annual vehicle sales target for fiscal 2020. High research and development expenses on advanced technologies for the development of EVs and driverless cars are likely to dent near-term margins. As such, investors are recommended to wait for a better entry point.
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Shares of Netflix have lost 15.6% in the past six months against Zacks Broadcast Radio and Television industry’s fall of 5.1%. The Zacks analyst believes that Netflix’s third-quarter 2019 subscriber addition rate faltered primarily due to a price hike in the United States, which, however aided ARPU growth on a year-over-year basis.
Management now expects net additions in the paid subscriber base to decline in 2019 due to higher churn rate and increased competition. Notably, upcoming streaming services from Disney, Apple (NASDAQ:AAPL), Comcast (NASDAQ:CMCSA) and AT&T (NYSE:T) pose a significant threat to Netflix’s streaming dominance. Shares have underperformed the industry on a year-to-date basis.
Moreover, high streaming content obligation and increased spending are expected to hurt free cash flow generation. Nevertheless, a solid content portfolio and expanding bundle-offerings through partnerships with Telefonica (MC:TEF), KDDI, AT&T, Comcast, DISH, Verizon (NYSE:VZ), Charter, Altice, T-Mobile and Sky bode well for the streaming platform.
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AbbVie’s shares have gained 32% over the past three months against the Zacks Large Cap Pharmaceuticals industry’s rise of 5.6%. The Zacks analyst believes that AbbVie’s key drug, Humira is performing well based on strong demand trends despite new competition. Imbruvica has multibillion-dollar potential.
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AbbVie has been successful in expanding approvals for its cancer drugs, Imbruvica and Venclexta. Moreover, it has an impressive late-stage pipeline. It gained approvals for two new drugs with significant potential, Skyrizi (risankizumab) and Rinvoq, this year. Both are off to a strong start.
The acquisition of Allergan (NYSE:AGN), if successful, should diversify AbbVie’s revenue base and accelerate its non-Humira business. However, AbbVie’s shares have underperformed the industry this year so far. Sales erosion due to direct biosimilar competition to Humira in international markets is a big headwind.
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Other noteworthy reports we are featuring today include Gilead Sciences (NASDAQ:GILD) (GILD), Morgan Stanley (NYSE:MS) (MS) and Fiserv (NASDAQ:FISV) (FISV).
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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
Today's Must Read
Featured Reports
Per the Zacks analyst, strong momentum in the HIV franchise on the back of Biktarvy drives growth for Gilead.
Per the Zacks analyst, loan growth and efforts to strengthen the wealth management segment will likely aid Morgan Stanley's top line.
The Zacks analyst believes that First Data acquisition will help Fiserv emerge as one of the world's largest payments and financial technology providers.
Per the Zacks analyst, Enbridge will generate stable fee-based revenues from its C$19-billion midstream growth project.
Per the Zacks analyst, expansion of futures products in emerging markets and OTC offerings poise the company well for growth.
Per the Zacks analyst, the buyout of Express Scripts has diversified Cigna's operations opening up new revenue streams; increasing membership superior products and services have led to revenue growth.
The Zacks analyst believes that Kensho buyout enables S&P Global to improve its core operations through the use of AI solutions and sophisticated algorithms. A highly competitive market is a concern.
New Upgrades
Per the Zacks analyst, Liberty Global's top-line is benefiting from increasing Internet speed and expanding mobile subscriber base at Virgin Media division.
Per the Zacks analyst, international opportunities and a diversified suite of trading products has led to high trading volumes driving revenues. Strong balance sheet aids investment for growth.
Per the Zacks Analyst, Dunkin' Brands' continual sales building and refranchising efforts coupled with aggressive expansion strategies are major factors driving growth.
New Downgrades
Per the Zacks analyst, soft industrial and automotive markets due to weakness in Asia and Europe are hurting Avnet's top line. Also, shorter lead times and lower pricing are affecting margins.
The Zacks analyst is worried about the low leasing revenues (down 3.8% in the first nine months of 2019) at Triton. Weak demand due to the Sino-U.S. trade tensions are hurting leasing revenues.
Per the Zacks analyst, the ongoing weakness in the North American industrial and upstream oil and gas end markets will hurt TriMas' top-line while higher freight and commodity costs will dent margins.
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