Today's Must Read
Abbott (ABT) Thrives on New Tests launch Amid Covid-19 Mayhem
Chevron (CVX) Buoyed by Improving Permian Well Economics
Friday, July 10, 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 Oracle (ORCL), Abbott Laboratories (ABT) and Chevron (CVX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Oracle shares have underperformed the Zacks Computer Software industry over the past year (-4.1% vs. +36.1%), but the Zacks analyst sees a better long-term trajectory for the company given rapid adoption of data cloud solutions and Autonomous Database.
Strong uptake of cloud-based solutions, comprising NetSuite ERP, Fusion ERP and Fusion HCM, remains notable. Moreover, companies like 8x8 and Zoom Video Communications have selected Oracle Cloud Infrastructure services to address business needs, which is a testament to the strength of its cloud offerings. Solid demand for the Oracle Dedicated Region Cloud@Customer supported by ML is anticipated to drive the top line.
Although the company’s shares have underperformed in the past year, these factors are expected to help it grow in the rest of 2020. However, coronavirus crisis led business impacts remain an overhang on renewals and payments. Rise in spending on product enhancements amid stiff competition in the cloud market is anticipated to weigh on margins.
Shares of Abbott have gained +10.1% over the past six months against the Zacks Medical Products industry’s fall of -9.5%. The Zacks analyst believes that the branded generics and international diabetes businesses should drive growth in the coming quarters. New product launches and acquisitions should boost sales further.
Abbott registered strong and consistent performance within EPD and Medical Devices segments in the first quarter of 2020. It has been in news within Diabetic Care on growth with FreeStyle Libre. With the healthcare industry shifting its focus to control the coronavirus-led damage, Abbott has witnessed its molecular diagnostics and nutrition businesses putting up impressive performance during this period.
The company launched three back-to-back diagnostic tests for covid-19. Abbott put up a robust performance in the first quarter with better-than-expected earnings and revenue numbers. However, Abbott’s Core Laboratory Diagnostics, cardiovascular and neuromodulation sales were significantly down in the reported quarter affected by lower demand in the past few months.
Chevron shares have lost -2.5% over the past three months against the Zacks Integrated Oil industry’s fall of -7.1%. The Zacks analyst believes that the supermajor’s reserve replacement ratio of 44% is indicative of its inability to add proved reserves to its reserve base to the amount of oil and gas produced.
The company's worldwide production averaged a record 3,058 MBOE/d in 2019, reflecting an increase of 4.4% thanks to expansion in the lucrative Permian Basin. Chevron’s well economics in the play also continues to improve as the company has been able to achieve a 40% reduction in its development and production costs since 2015.
However, Chevron is not immune to this historic oil price crash, forcing it to cut capex and suspend buybacks. The company’s high oil price sensitivity is a concern too.
Other noteworthy reports we are featuring today include Sanofi (SNY), Royal Dutch Shell (RDS.A) and Boeing (BA).
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Director of Research
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>>>