Friday, March 11, 2022
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 Eli Lilly and Company (LLY), NIKE, Inc. (NKE) and Micron Technology, Inc. (MU). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Shares of Eli Lilly have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+29.6% vs. +19.2%). Lilly boasts a solid portfolio of core drugs in diabetes, autoimmune diseases and cancer. The Zacks analyst believes that Lilly’s revenue growth is being driven by higher demand for drugs like Trulicity, Taltz, and others. It is regularly adding promising new pipeline assets through business development deals. It has an exciting pipeline of potential new medicines including tirzepatide for type II diabetes and donanemab for early Alzheimer’s disease. Both candidates have multibillion dollar sales potential.
However, generic competition for several drugs, rising pricing pressure in the United States mainly on key drug, Trulicity, and price cuts in some international markets like China, Japan and Europe are some top-line headwinds.
NIKE shares have declined -10.2% over the past year against the Zacks Shoes and Retail Apparel industry’s decline of -10.4%. The Zacks analyst believes that NIKE’s shares have declined in the past year on headwinds related to supply chain constraints. Declines in Greater China and APLA, and the ongoing impacts of supply chain headwinds in the marketplace partly hurt the company’s revenues in second-quarter fiscal 2022.
NIKE expects volatility in fiscal 2022 due to disruptions caused by the COVID-variants. However, the company’s product innovation, brand strength and scale of operations should continue to drive digital sales. It remains on track to deliver on its fiscal 2025 outlook.
Shares of Micron have underperformed the S&P 500 index in the year-to-date period (-18.7% vs. -10.5%). The Zacks analyst believes that Micron’s near-term profitability is likely to hurt by its planned salary hikes. Additionally, higher level of customer inventory in the cloud, graphics and enterprise market is a key threat. Soft server demand from several enterprise original equipment manufacturer (OEM) customers is also a concern.
However, Micron has already witnessed growing demand for memory chips from cloud-computing providers and acceleration in 5G (fifth-generation) cellular network adoptions. Rising mix of high-value solutions, enhancement in customer engagement and improvement in cost structure are growth drivers as well. Further, 5G adoption beyond mobile is likely to spur demand for memory and storage, particularly in Internet of Things (IoT) devices and wireless infrastructure.
Other noteworthy reports we are featuring today include Bayer Aktiengesellschaft (BAYRY), American International Group, Inc. (AIG) and Valero Energy Corporation (VLO).
Director of Research
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 Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today’s Must Read
Strong Programs Aid Hexcel (HXL) Amid COVID led Slowdown
Per the Zacks analyst, Hexcel’s near-term prospects was impacted by outbreak of the pandemic but its impressive set of programs tend to boost long-term growth prospects.
Valero (VLO) Gains on Higher Gulf Coast Refinery Throughput
The Zacks analyst is impressed by Valero’s Gulf Coast refineries contributing the most to its total throughput volumes. Higher Gulf Coast export volumes are also likely to support its margins.
Baker Hughes (BKR) Gains From Higher Oilfield Services Order
The Zacks analyst appreciates Baker Hughes since it will secure handsome cash flows from higher oilfield services order intake. Yet, declining volume in subsea productions systems is a concern.
AIG Benefits from Improving Topline, High Debts Bother
Per the Zacks analyst, buyouts and divestitures have enhanced the company’s capabilities, which in turn, have led to top-line growth. However, elevated debt level remains a concern.
Buyouts to Aid State Street (STT) Top Line Amid Low Rates
Per the Zacks analyst, business servicing wins, synergies from strategic buyouts and global footprint will continue to aid State Street amid lower interest rates and tough operating backdrop.
Acquisitions, Solid Telehealth Platform Aid Teladoc (TDOC)
Per the Zacks analyst, several acquisitions have helped Teladoc expand its distribution capabilities and global presence. A robust telehealth platform poises it well amid a booming telehealth market.
Recent Drug Approvals Aid Bayer (BAYRY), Stiff Rivalry a Woe
Per the Zacks analyst, Bayer has undertaken several initiatives to strengthen its portfolio. However, competition from generic threats remains a concern.
ABM Industries Incorporated (ABM) to Gain From ELEVATE Plan
Per the Zacks analyst, ABM’ multi-year comprehensive strategic plan, ELEVATE, is expected to significantly accelerate the company’s organic growth and reinforce profitability.
Higher Steel Prices, Strategic Acquisitions Benefit Nucor (NUE)
Per the Zacks analyst, Nucor will gain from higher steel prices due to tight supply and higher end-market demand. It will also grow its business through strategic acquisitions.
Solid Segmental Revenue Growth Aids AMN Healthcare (AMN)
Per the Zacks analyst, solid revenue growth across Nurse and Allied Solutions, as well as Physical and Leadership and Technology and Workforce Solutions businesses continue to drive AMN Healthcare.
Ubiquiti (UI) Hurt by Supply Disruptions, Increasing Costs
Per the Zacks analyst, Ubiquiti continues to deal with the pandemic-triggered supply chain challenges along with increasing input material costs, which directly weigh on its bottom line.
Staffing Challenges & Inflation Hurt Red Robin (RRGB) Prospects
Per the Zacks analyst, Red Robin has been experiencing coronavirus-induced staffing and supply-chain challenges. Also, commodity and restaurant labor cost inflation is a concern.
Dismal Traffic & High Costs Hurt Yum China’s (YUMC) Prospects
Per the Zacks analyst, Yum China has been witnessing elevated costs on account of labor inflation and packaging upgrades. Also, decline in traffic from pre-pandemic levels is a concern.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.