Friday, January 5, 2024

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), Salesforce, Inc. (CRM) and Philip Morris International Inc. (PM). 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 Merck have gained +4.7% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +13.0%. The company’s products like Keytruda and Gardasil have been driving sales. With continued label expansion into new indications, particularly earlier-stage launches, Keytruda is expected to remain a key top-line driver.

Animal health and vaccine products are core growth drivers. Merck boasts a strong cancer pipeline, including Keytruda, which should drive long-term growth. Merck is investing in M&A activity to strengthen its pipeline.

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 Merk here >>>)

Shares of Salesforce have outperformed the Zacks Computer - Software industry over the past year (+78.8% vs. +57.3%). The company is benefiting from a robust demand environment as customers are undergoing a major digital transformation. The company’s sustained focus on aligning products with customer needs is driving the top line.

Continued deal wins in the international market are another growth driver. The buyout of Slack has positioned the company as a leader in enterprise team collaboration and improved its competitive standing versus Microsoft Teams. Salesforce’s strategy of continuously expanding generative AI offerings will help the company tap the growing opportunities in the space.

However, stiff competition and unfavorable currency fluctuations are concerns. Also, the challenging macroeconomic environment could hurt its growth prospects.

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

Shares of Philip Morris have outperformed the Zacks Tobacco industry over the past six months (+0.9% vs. -1.5%). The company has been gaining from its pricing power. Higher pricing variance was an upside to the company’s performance in the third quarter of 2023 and is likely to remain a driver.

A focus on reduced-risk products, especially IQOS, has been working well for Philip Morris, which is well-placed to become a majority smoke-free company by 2025. Strength in ZYN is also expected to drive performance in 2023. Management expects net revenues to increase by nearly 8% on an organic basis in 2023.

Philip Morris expects to make additional growth-oriented investments in 2023, including the commercialization of ILUMA. However, this may impact margins. Apart from this, soft cigarette shipment volumes have been a concern. In 2023, cigarette shipment volumes are expected to decline by 1-2%.

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

Other noteworthy reports we are featuring today include Novartis AG (NVS), CVS Health Corp. (CVS) and CME Group Inc. (CME).

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>>>