Monday, June 10, 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 Oracle (ORCL), Eli Lilly (LLY) and Mondelez (MDLZ). 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 >>>

Oracle’s shares have underperformed the Zacks Computer Software industry in the past six months, gaining +14.7% vs. +21.4%. Oracle is one of the largest enterprise-grade database, middleware and application software providers. The Zacks analyst thinks the company is benefiting from strong adoption of its cloud-based solutions, comprising Fusion ERP and Fusion HCM, among others.

Partnerships with the likes of Accenture are helping the company rapidly expand its cloud-base clientele. Also, anticipated strong demand for the next-generation autonomous database supported by machine learning will boost its competitive position against Amazon Web Services (AWS).

Nevertheless, stiff competition in the cloud market from dominant players is anticipated to limit margin expansion. Further, lower hardware volumes are anticipated to hurt top-line growth consequently keeping margins under pressure. Additionally, integration risks from buyouts remain a concern.

(You can read the full research report on Oracle here >>>).

Shares of Eli Lilly have gained +2.2% year to date, outperforming the Zacks Large Cap Pharmaceuticals industry, which has gained +1.7% over the same period. The Zacks analyst thinks Lilly’s revenue growth in 2019 will likely be driven by higher demand for its newer drugs including Trulicity, Jardiance, Taltz, Verzenio as well as new migraine drug, Emgality as some older drugs like Cialis face generic competition.

Lilly has made significant pipeline progress in the past year with several positive late-stage data readouts, multiple approvals and regulatory submissions. Lilly also added promising new pipeline assets through business development deals.

However, competitive pressure on Lilly’s drugs is expected to rise in 2019. Generic competition for several drugs including Cialis, rising pricing pressure, currency headwinds and the impact of the failed Lartruvo study are expected to put pressure on the top line.

(You can read the full research report on Eli Lilly here >>>).

Mondelez’s shares have gained +14.7% in the past three months, outperforming the +6.1% increase of the Zacks Food Preparation industry. The Zacks analyst thinks the company is steadily gaining from strategic pricing endeavors. In fact, during the first quarter of 2019, balanced pricing and volume/mix helped organic revenues to rise nearly 3.7%. Also, pricing led to adjusted gross margin improvement.

Going forward, management plans to continue striking a balance between volumes and pricing. Additionally, it is progressing well with saving initiatives. Mondelez also focuses on brand building through innovation. It is bolstering presence in emerging markets.

However, the company grapples with adverse currency movements, which dented top-line performance during the first quarter. Management expects currency fluctuation to be a drag in 2019. Higher raw material costs and rising SG&A expenses are other concerns.

(You can read the full research report on Mondelez here >>>).

Other noteworthy reports we are featuring today include Boeing (BA), Walgreens (WBA) and Southwest Airlines (LUV).

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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 Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>