Top Stock Reports For Procter & Gamble, T-Mobile & Zoetis
Zacks Investment Research | Aug 29, 2019 01:49AM ET
Thursday, August 29, 2019
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features updated research reports on 16 major stocks, including Procter & Gamble (PG), T-Mobile (TMUS) and Zoetis (ZTS). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.
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Procter & Gamble’s shares have outperformed the Zacks Soap and Cleaning Materials industry in the past year, gaining +45.4% vs. +25.8%. The Zacks analyst thinks that this can be attributed to the company’s impressive earnings history. It delivered its 17th straight earnings beat in fourth-quarter fiscal 2019, with sales beat in seven of the last eight quarters.
Earnings benefited from its ongoing productivity efforts, while strong organic sales growth backed by higher shipment volumes and favorable price/mix boosted the top line. The company also provided upbeat guidance for fiscal 2020. It is gaining from focus on product improvement, packaging and marketing initiatives, and productivity and cost-savings plan.
However, adverse foreign currency rates are hurting the company’s top and bottom lines. The company expects currency headwinds to hurt its top line in fiscal 2020. Moreover, global economic challenges and stiff competition poses concern.
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Shares of T-Mobile shares have outperformed the Zacks National Wireless industry over the past year, gaining +16.8% vs. +5.1%. The Zacks analyst likes the fact that T-Mobile has cleared most of the regulatory and shareholder approvals for its game-changing merger with Sprint.
The New T-Mobile will have about 127 million customers and a strong closing balance sheet, and is expected to bring robust competition in the 5G era. T-Mobile continues to invest in its network and prepare for nationwide 5G with the aggressive rollout of its 600 MHz spectrum. The wireless carrier has introduced 5G millimeter wave network in six cities including New York and Los Angeles.
However, a highly competitive and saturated U.S. wireless market remains a major headwind. Intensifying competition is likely to limit its ability to attract and retain customers and may adversely affect operating results. The company launched several low-priced service plans which have enhanced its revenues, but not significantly improved the bottom line.
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Zoetis’s shares have outperformed the Zacks Drugs industry in the past year, gaining +40% vs -21.2%. Zoetis’ second-quarter earnings and sales beat estimates on the back of growth in new parasiticide products (Simparica and Stronghold Plus) and vaccines, a solid dermatology portfolio, and the addition of Abaxis’ diagnostics platform.
Livestock product sales returned to growth as well in the second quarter. The Zacks analyst thinks the Abaxis acquisition has strengthened the company’s presence in the animal health diagnostics market. Moreover, Zoetis’ five-year collaboration agreement with Regeneron will further diversify its portfolio. Shares have outperformed the industry in the year so far.
However, growth in the cattle market is expected to be limited in 2019, based on the challenging market conditions for beef and dairy customers. Moreover, growth in the swine market is being impacted by the African swine fever in China.
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Other noteworthy reports we are featuring today include Autodesk (NASDAQ:ADSK), Hewlett Packard (HPE) and FedEx (FDX).
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Note: Our Director of Research 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
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Featured Reports/h6
Per the Zacks analyst, portfolio strength is helping the company steer past competition in manufacturing space. However, ongoing trade-war and sluggish demand is a headwind.
While Barrick faces challenges from higher production costs, it should gain from its actions to cut debt and synergies of the Randgold buyout, per the Zacks analyst.
Per the Zacks analyst, Hewlett Packard's cost-saving initiatives and favorable commodity pricing is leading to expanding margins. Moreover, partnerships with GE Digital and H3C are also tailwinds.
While Cimarex Energy's Permian Basin and Mid-Continent premium acreages bode well, the Zacks analyst is worried about rising production costs and expenses.
Per the Zacks analyst, encouraging data from clinical studies on its two pipeline candidates has boosted Arena.
Per the Zacks analyst, its rising premiums written on the back of acquisitions and strength in new physician business has led to significant growth.
Per the Zacks analyst, Pacira focuses on improving sales of its flagship product Exparel while label expansion studies look encouraging.
Per the Zacks analyst, portfolio strength is helping the company steer past competition in manufacturing space. However, ongoing trade-war and sluggish demand is a headwind.
While Barrick faces challenges from higher production costs, it should gain from its actions to cut debt and synergies of the Randgold buyout, per the Zacks analyst.
Per the Zacks analyst, Hewlett Packard's cost-saving initiatives and favorable commodity pricing is leading to expanding margins. Moreover, partnerships with GE Digital and H3C are also tailwinds.
While Cimarex Energy's Permian Basin and Mid-Continent premium acreages bode well, the Zacks analyst is worried about rising production costs and expenses.
Per the Zacks analyst, encouraging data from clinical studies on its two pipeline candidates has boosted Arena.
Per the Zacks analyst, its rising premiums written on the back of acquisitions and strength in new physician business has led to significant growth.
Per the Zacks analyst, Pacira focuses on improving sales of its flagship product Exparel while label expansion studies look encouraging.
New Upgrades/h6
The Zacks analyst is impressed with FedEx's efforts to reward its shareholders. The phenomenal e-commerce growth is also a positive fo5r the company.
Per the Zacks analyst, global deployment of 5G connectivity is driving the demand for Xilinx's wireless business. However, ban on shipments to Huawei and the ongoing trade war are headwinds.
Per the Zacks analyst, investment in new products, productivity initiatives, acquisitions and momentum in heavy industries will drive growth for Rockwell Automation.
The Zacks analyst is impressed with FedEx's efforts to reward its shareholders. The phenomenal e-commerce growth is also a positive fo5r the company.
Per the Zacks analyst, global deployment of 5G connectivity is driving the demand for Xilinx's wireless business. However, ban on shipments to Huawei and the ongoing trade war are headwinds.
Per the Zacks analyst, investment in new products, productivity initiatives, acquisitions and momentum in heavy industries will drive growth for Rockwell Automation.
New Downgrades/h6
The top-line headwinds for Sanofi, per the Zacks analyst, are weak performance of the Diabetes unit, generic competition for many drugs and slower-than-expected uptake of core products like Praluent.
The Zacks analyst is worried about the company's increasing unit costs due to rise in fuel expenses and depreciation of the Brazilian real. Its high debt levels further add to the woes.
Per the Zacks analyst, stiff competition in the sports business and impact of ASC Topic 606 hurt Madison Square Garden. Revenues from Sports segment declined 32% in fourth-quarter fiscal 2019.
The top-line headwinds for Sanofi, per the Zacks analyst, are weak performance of the Diabetes unit, generic competition for many drugs and slower-than-expected uptake of core products like Praluent.
The Zacks analyst is worried about the company's increasing unit costs due to rise in fuel expenses and depreciation of the Brazilian real. Its high debt levels further add to the woes.
Per the Zacks analyst, stiff competition in the sports business and impact of ASC Topic 606 hurt Madison Square Garden. Revenues from Sports segment declined 32% in fourth-quarter fiscal 2019.
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