Today's Must Read
Accretive Buyouts, Strong Balance Sheet Aid Mastercard (MA)
Cancer Drugs Push AstraZeneca's (AZN) Sales, Pipeline Solid
Wednesday, August 26, 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 Amazon.com (AMZN), Mastercard (MA) and AstraZeneca (AZN). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amazon was star performer even prior to the Covid-19 pandemic, but the work-from-home environment in the post-pandemic period has been tailor made for the company. This is reflected in the stock's outsized year-to-date performance (up +81.1% vs. +6.9% for the broader market), a trend that the Zacks analyst sees as sustainable given the company's online standing and position in the cloud computing space.
Additionally, solid Prime momentum owing to ultrafast delivery services and expanding content portfolio remained tailwind. Further, strengthening AWS services and its growing adoption rate contributed well. Additionally, improving Alexa skills and features remained a major positive.
Expanding smart home products offerings were tailwinds. However, accelerating coronavirus related expenses remain major concerns. Also, foreign exchange headwinds and rising cloud competition are risks.
Shares of Mastercard have gained +21.6% over the past six months against the Zacks Financial Transaction Services industry’s rise of +10.8%. The Zacks analyst believes that Mastercard’s strategic acquisitions, alliances and technology upgrades, along with product-diversification and geographic-expansion initiatives will augur well in the long term.
The company has undertaken several acquisitions to supplement organic efforts and diversify revenues over the years, which has helped expand its addressable markets and strengthen core product solutions. Investment in technology keeps it at the forefront of the rapidly-evolving payments industry.
It is also witnessing buoyant demand for its Data & Analytics and Cyber solutions. Its solid capital position enables investment in business. Also, its second-quarter earnings beat estimates on decreased rebates and incentives. However, escalating costs might put pressure on the company’s margins. It also cancelled its annual 2020 outlook for net revenues and operating expense due to coronavirus-induced business loss.
AstraZeneca shares have gained +8.7% over the past three months against the Zacks Large Cap Pharmaceuticals industry’s rise of +5.3%. The Zacks analyst believes that AstraZeneca’s newer drugs, mainly cancer medicines Lynparza, Tagrisso and Imfinzi should keep driving revenues in 2020.
Its pipeline is strong with abundance of catalysts lined up for 2020 including data on COVID-19 vaccine candidate, AZD1222. AstraZeneca has also engaged in external acquisitions and strategic collaborations to boost its pipeline while investing in geographic areas of high growth like China. Cost-cutting efforts should drive earnings.
However, its products like Nexium, Crestor and Seroquel are facing generic competition, which is hurting sales. The diabetes franchise also faces stiff competition while pricing pressure is hurting sales in the respiratory unit.
Other noteworthy reports we are featuring today include NextEra Energy (NEE), Royal Dutch Shell (RDS.A) and Advanced Micro Devices (AMD).
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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>>>