Wednesday, February 15, 2023

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 Merck & Co., Inc. (MRK), Thermo Fisher Scientific Inc. (TMO) and American Express Co. (AXP). 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 >>>

Merck’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+39.8% vs. +11.8%). Drugs like Keytruda and Gardasil (HPV vaccine) have been driving sales. With continued label expansion into new indications & early-stage settings, Keytruda is expected to remain a key top-line driver.

Animal health and vaccine products are core growth drivers. Its new COVID oral antiviral pill, Lagevrio, has become a key top-line driver in 2022. Merck boasts a strong cancer pipeline, including Keytruda, which should help drive long-term growth.

However, generic competition for several drugs and rising competitive pressure, mainly on the diabetes franchise, will continue to be overhangs on the top line. There are concerns about Merck’s ability to grow its non-oncology business ahead of Keytruda’s loss of exclusivity later in the decade.

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

Shares of Thermo Fisher Scientific have outperformed the Zacks Medical - Instruments industry over the past year (+2.7% vs. -12.0%). The company’s robust year-over-year revenue growth in the Analytical Instruments and the Laboratory Products and Biopharma Services segments appears promising.

Thermo Fisher’s accelerated investments to expand bioproduction capacity also buoy optimism. In the quarter, Thermo Fisher witnessed strength in three out of its four end markets. The upbeat guidance for 2022 is indicative that this growth momentum will continue.

However, the year-over-year decline in revenues in the Life Science Solutions and Specialty Diagnostics segment is disappointing. The contraction of both margins on escalating costs and expenses does not bode well either. The year-over-year decline in adjusted earnings is concerning.

(You can read the full research report on Thermo Fisher Scientific here >>>)

Shares of American Express have declined -8.6% over the past year against the Zacks Financial - Miscellaneous Services industry’s decline of -17.7%. Due to higher utilization of the company’s cards, expense in the form of card member services and card member rewards is likely to go up and strain the company's margins. Also, marketing and business development expenses are expected to rise, hurting the bottom line. As such, the stock warrants a cautious stance.

Nevertheless, American Express have adopted several growth initiatives, such as launching new products, enhancing existing features, reaching new agreements and forging alliances, are boosting its revenues. Consumer spending on travel and entertainment, which carry higher margins for AmEx, is advancing well.

The company’s balance sheet looks strong with manageable debt. Solid cash-generation abilities enable the pursuit of business investments and capital deployment via share buybacks and dividends.

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

Other noteworthy reports we are featuring today Valero Energy Corp. (VLO), Enphase Energy, Inc. (ENPH) and Weyerhaeuser Co. (WY).

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>>>