Top Stock Reports For Johnson & Johnson, Boeing & Broadcom
Zacks Investment Research | Sep 19, 2019 02:01AM ET
Thursday, September 19, 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 Johnson & Johnson (NYSE:JNJ) (JNJ), Boeing (BA) and Broadcom (NASDAQ:AVGO) (AVGO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Johnson & Johnson’s shares have outperformed the Zacks Large-Cap Pharmaceuticals industry in the year-to-date period (1% vs. -1.5%). The Zacks analyst thinks that J&J is witnessing significant generic/biosimilar headwinds in the Pharma unit in 2019.
However, J&J’s sales and earnings growth is expected to accelerate in 2020 supported by contribution from new drugs like Tremfya and successful label expansion of cancer drugs like Imbruvica and Darzalex and immunology drug, Stelara. J&J is also making rapid progress with its pipeline and line extensions. It has already gained FDA approval for two new drugs in 2019, Balversa and Spravato.
Meanwhile, share buybacks and restructuring initiatives should provide bottom-line support. J&J’s shares have outperformed the industry this year. Headwinds like biosimilar/generic competition and pricing pressure remain. The talc and opioid lawsuits are overhangs on the stock.
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Shares of Boeing have gained 2.7% in the past six months, underperforming the Zacks Aerospace & Defense industry’s rise of 16.2%. The Zacks analyst believes that the company’s proposed joint venture with Embraer will strengthen Boeing’s commercial business significantly.
Boeing remains the largest aircraft manufacturer globally in terms of revenues, orders and deliveries, and one of the major aerospace and defense contractors. Boeing expects the commercial fleet to be fueled by sustained annual growth in commercial passenger traffic along with a big wave of retiring, old planes.
However, the commercial business has suffered a major setback lately due to lower 737 deliveries, following the 737 Max product line's grounding and subsequent costs associated with it. Consequently, its revenues, earnings and cash flow position were affected significantly. This must have caused the company’s share price to underperform its industry year to date.
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Broadcom’s shares have gained 3.1% in the past three months, underperforming the Zacks Electronics - Semiconductors industry’s rise of 5.8% over the same period. The Zacks analyst believes that the company is benefiting from strong demand for its wireless solutions and expanding product portfolio, which makes it well-positioned to address the needs of rapidly growing technologies like IoT and 5G.
The company intends to strengthen presence in the infrastructure software vertical particularly. In this regard, acquisition of CA and Symantec’s Enterprise Security Business remain extremely significant. Notably, shares of Broadcom have outperformed the industry in the past year.
Nonetheless, the company provided a tepid fiscal 2019 revenue view. Further, the company faces intensifying competition and integration risks due to frequent acquisitions. The company’s leveraged balance sheet continues to be a headwind.
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Other noteworthy reports we are featuring today include Anthem (NYSE:ANTM) (ANTM), Northrop Grumman (NOC) and Allstate (ALL).
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/h6
Featured Reports/h6
Per the Zacks Analyst, Northrop Grumman's regular investments in growth projects bolsters its future prospects. However, it continues to incur higher operating expenses that raises concerns.
The Zacks analyst believes that Canadian Natural's growing free cash flow should help it hike payouts but is concerned about the C$3.25-billion term loan to fund the Devon Energy (NYSE:DVN) asset acquisition.
Per the Zacks analyst, design wins and ramp-up in current programs are aiding Mercury's growth.
Per the Zacks analyst, a number of acquisitions and collaborations have helped it enhance its capabilities and boost its Medicare business.
Increased parcel volumes and strong performance of the express delivery services unit are aiding ZTO Express' top line. However, the company's escalating operating expenses are worrisome.
The Zacks analyst believes that Apache's reserve replacement ratio of 135% indicates little risk of depleting its reserves anytime soon.
Per the Zacks Analyst, Seattle Genetics focuses on driving sales of its flagship product Adcetris. However, stiff competition from big pharma companies in the Hodgkin lymphoma market is a woe.
Per the Zacks Analyst, Northrop Grumman's regular investments in growth projects bolsters its future prospects. However, it continues to incur higher operating expenses that raises concerns.
The Zacks analyst believes that Canadian Natural's growing free cash flow should help it hike payouts but is concerned about the C$3.25-billion term loan to fund the Devon Energy (NYSE:DVN) asset acquisition.
Per the Zacks analyst, design wins and ramp-up in current programs are aiding Mercury's growth.
Per the Zacks analyst, a number of acquisitions and collaborations have helped it enhance its capabilities and boost its Medicare business.
Increased parcel volumes and strong performance of the express delivery services unit are aiding ZTO Express' top line. However, the company's escalating operating expenses are worrisome.
The Zacks analyst believes that Apache's reserve replacement ratio of 135% indicates little risk of depleting its reserves anytime soon.
Per the Zacks Analyst, Seattle Genetics focuses on driving sales of its flagship product Adcetris. However, stiff competition from big pharma companies in the Hodgkin lymphoma market is a woe.
New Upgrades/h6
Per the Zacks Analyst, Intrexon's expanding portfolio of technologies has enabled the company to develop a robust pipeline. The company's efforts to growth by acquisitions and ECCs are encouraging.
Per the Zacks analyst, premium growth in the Property-Liability Segment remains strong owing to pricing discipline and strong claims management, that has contributed to topline growth.
Per the Zacks analyst, business wins and strategic acquisitions over the past few years will continue to aid State Street's top line. Its efficient capital deployments reflect a strong balance sheet.
Per the Zacks Analyst, Intrexon's expanding portfolio of technologies has enabled the company to develop a robust pipeline. The company's efforts to growth by acquisitions and ECCs are encouraging.
Per the Zacks analyst, premium growth in the Property-Liability Segment remains strong owing to pricing discipline and strong claims management, that has contributed to topline growth.
Per the Zacks analyst, business wins and strategic acquisitions over the past few years will continue to aid State Street's top line. Its efficient capital deployments reflect a strong balance sheet.
New Downgrades/h6
Per the Zacks analyst, lower-than-anticipated level of activity within the Display Technologies and Optical Communications business segments have taken a heavy toll on Corning's growth trajectory.
Per the Zacks analyst, NetApp is hurt by sluggishness in storage business owing to uncertainty in broader macroeconomic environment. Further, stiff competition from storage peers remains a concern.
Per the Zacks' analyst, inventory cleaning process and markdowns weigh upon Macy's bottom line in the second quarter. This also compelled management to curtail its fiscal 2019 earnings guidance.
Per the Zacks analyst, lower-than-anticipated level of activity within the Display Technologies and Optical Communications business segments have taken a heavy toll on Corning's growth trajectory.
Per the Zacks analyst, NetApp is hurt by sluggishness in storage business owing to uncertainty in broader macroeconomic environment. Further, stiff competition from storage peers remains a concern.
Per the Zacks' analyst, inventory cleaning process and markdowns weigh upon Macy's bottom line in the second quarter. This also compelled management to curtail its fiscal 2019 earnings guidance.
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