Thursday, March 5, 2020

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 Walmart (WMT), Pfizer (PFE) and Charter Communications (CHTR). 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 >>>

Walmart’s shares have underperformed the Zacks Supermarkets industry over the past six months (+1.8% vs. +2.6%). The Zacks analyst believes that the company’s focus on strengthening e-commerce and store operations has helped it retain its sturdy comps trend in fourth-quarter fiscal 2019, wherein U.S. comps rose for the 22nd straight time.

Further, e-commerce sales surged on robust online grocery performance. Management expects e-commerce sales to rise nearly 30% in fiscal 2021, wherein International sales are likely to grow 4%.

However, Walmart’s earnings broke its positive surprise trend and fell year over year in the quarter due to higher cost of sales and increased operating, selling, general and administrative expenses. Additionally, disruption in Chile and a legal matter affected the bottom line. Further, the gross margin remained soft due to pricing and growing e-commerce mix. 

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

Shares of Pfizer have lost -13.1% over the past year against the Zacks Large-Cap Pharmaceuticals industry’s rise of +5.5%. The Zacks analyst believes that the Consumer Healthcare joint venture with Glaxo, the Array acquisition and the pending merger of Upjohn unit with Mylan, if successful, will make Pfizer a smaller company with a diversified portfolio of innovative drugs and vaccines.

The smaller Pfizer should see better revenue growth as the Lyrica LOE cliff will go away. Pfizer expects continued strong growth of key brands like Ibrance, Inlyta and Eliquis to drive sales in 2020. Pfizer also has a strong portfolio of new drugs, which will accelerate growth in 2020 and beyond.  However, Lyrica generic erosion, currency headwinds and pricing pressure are the key near-term top-line headwinds.

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

Charter Communications’ shares have gained +11.7% over the past three months against the Zacks Cable TV industry’s rise of +0.6%. The Zacks analyst believes that the company is benefiting from growth in Internet, mobile, commercial and video revenues.

Increase in Internet speed at no extra cost is also aiding subscriber growth. Additionally, Charter’s spectrum mobile products are gaining traction and subscriber base is increasing rapidly. Launch of spectrum mobile services to small and medium business customers is a key catalyst. Improving free cash flow is a growth driver.

However, commercial revenues continued to suffer due to migration of customers to Spectrum pricing, and packaging from Legacy TWC and Legacy Bright House. Further, Charter persistently loses video subscribers, primarily due to cord-cutting and intense competition from streaming service providers like Netflix and Amazon.

(You can read the full research report on Charter Communications here >>>)

Other noteworthy reports we are featuring today include Eli Lilly (LLY), Lockheed Martin (LMT) and CME Group (CME).

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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>>>