Wednesday, March 20, 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 JPMorgan Chase & Co. (JPM), Merck & Co., Inc. (MRK) and SAP SE (SAP). 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 JPMorgan Chase have outperformed the Zacks Banks - Major Regional industry over the past year (+53.0% vs. +37.0%). Higher interest rates, buyouts, opening new branches and decent loan demand will aid net interest income (NII), though rising funding costs will weigh on it.

While there has been a resurgence in M&A activities so far this year, a complete revival in deal-making is not certain. Thus, the performance of the investment banking (IB) business is not expected to improve significantly.

Along with this, the volatile nature of the capital markets business and high mortgage rates, will likely hamper fee income growth. Mounting operating expenses will hurt profits.

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

Merck shares have gained +15.7% over the past six months against the Zacks Large Cap Pharmaceuticals industry’s gain of +16.7%. 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 see continued growth.

Animal health and vaccine products are core growth drivers. Merck boasts a strong cancer pipeline, including Keytruda, which should drive long-term growth. The company 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 Merck here >>>)

Shares of SAP have outperformed the Zacks Computer - Software industry over the past year (+54.7% vs. +51.2%). The company’s performance is benefiting from continued strength in its cloud business, especially the Rise with SAP and Grow with SAP solutions. Momentum in SAP’s business technology platform, particularly the S/4HANA solution, along with proliferation of generative AI bodes well.

SAP is now focusing more on vital strategic growth areas, especially Business AI, and position the company for future growth. Management also reaffirmed its 2025 long-term targets for cloud and total revenues. Frequent product launches, and strategic acquisitions and collaborations are other tailwinds.

However, continued softness in the Software license and support business segment coupled with global macroeconomic weakness are concerning. Increasing costs and stiff competition are additional headwinds.

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

Other noteworthy reports we are featuring today include Lam Research Corporation (LRCX), Regeneron Pharmaceuticals, Inc. (REGN) and Brown-Forman Corporation (BF.B).

Director of Research

Sheraz Mian

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>>>