Today's Must Read
P&G (PG) Gains from Higher Coronavirus-Led Product Demand
Launch of New Tests Aid Thermo Fisher's (TMO) NGS Arm
Tuesday, August 25, 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 Johnson & Johnson (JNJ), The Procter & Gamble Company (PG) and Thermo Fisher Scientific (TMO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Johnson & Johnson shares have outperformed the Zacks Large Cap Pharmaceuticals industry in the year to date period (+4.3% vs. +2%). The Zacks analyst believes that J&J’s diversification makes it relatively resilient amid macroeconomic turmoil. While the coronavirus pandemic is hurting its Medical Devices unit, the Pharma and Consumer segments remain resilient.
J&J’s Pharma unit is performing above-market levels, supported by contribution from new drugs and successful label expansion of blockbuster drugs, Imbruvica, Darzalex and Stelara. J&J is also making rapid progress with its pipeline and line extensions. Several pivotal data readouts and regulatory milestones are expected in 2020.
However, headwinds like generic competition and pricing pressure remain. J&J faces numerous lawsuits, which allege personal injuries to patients caused by the use of its products. These lawsuits have resulted in uncertainty.
Shares of Procter & Gamble have gained +15.3% over the past six months against the Zacks Soap and Cleaning Materials industry’s rise of +13.4%. The Zacks analyst believes that the company’s efforts to make its cleaning and personal care products available during this pandemic have helped boost sales.
Earnings and sales grew year over year in the fourth-quarter fiscal 2020 backed by rising demand for household cleaning, personal health and cleansing products stemming from the COVID-19 pandemic. Top line gained from organic sales growth, driven by rise in organic shipment volume and better pricing. Encouragingly, it issued an upbeat fiscal 2021 view.
Further, cost savings aided core currency-neutral gross and operating margin by 250 bps and 190 bps, respectively. Also, it delivered adjusted free cash flow productivity of 114% in the fiscal fourth quarter. However, currency fluctuations have weighed on margins and are likely to affect fiscal 2021 results. Additionally, stiff competition remains a woe.
Thermo Fisher shares have gained +26.3% over the past three months against the Zacks Medical Instruments industry’s rise of +15.8%. The Zacks analyst believes that with several takeovers including Advanced Bioprocessing buyout from BD and Patheon, Thermo Fisher is expanding inorganic growth profile. The company’s strong focus on emerging markets is also encouraging.
In terms of end market, pharma and biotech registered growth on robust performance in bioproduction and pharma services businesses. The COVID-19 sales also boosted the company’s quarterly results.
A strong capital structure looks encouraging. Its second quarter results were better-than-expected. However, the coronavirus outbreak has massively disrupted the global supply chain. Two of the end markets registered loss in the first quarter, largely due to customer shutdowns in China.
Other noteworthy reports we are featuring today include Coca-Cola (KO), Comcast (CMCSA) and Texas Instruments (TXN).
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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>>>