Today's Must Read
Digitalization to Aid McDonald's (MCD), Dismal Comps a Worry
Opdivo, Eliquis Fuel Bristol-Myers (BMY) Amid Competition
Friday, September 11, 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 Facebook (FB), McDonalds (MCD) and Bristol-Myers Squibb (BMY). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Facebook shares have outperformed the S&P 500 in the year-to-date period (+30.6% vs. +3.8%) on the back of steady user growth across all regions, particularly the Asia Pacific region.
The coronavirus-led lockdowns and shelter-at-place guidelines have increased engagement of its products like Instagram, WhatsApp, Messenger and Facebook Watch. However, Facebook expects user-base growth to be flat or slightly down in most of its regions in the third quarter of 2020, sequentially. The company expects ad-revenue growth on a year-over-year basis to be roughly 10%.
Facebook assumes some of the recent surge in community engagement to normalize as regions reopen. Further, a number of companies have announced plans to freeze ad spending on Facebook due to its failure to eradicate hate speech and misinformation. This is expected to hurt top-line growth, at least in the near term.
Shares of McDonalds have gained +27.7% over the past six months against the Zacks Restaurants industry’s rise of +35.4%. The Zacks analyst believes that the company is benefiting from an increase in drive-thru sales.
McDonald’s increased focus on delivery and accelerated deployment of EOTF restaurants in the United States is commendable. Additionally, the company is making every effort to drive growth in international markets as well. Of late, earning estimates for 2020 have increased.
The company witnessed continued improvement in results throughout the second quarter. However, dismal comps and high debt is hurting the company. The company’s comps declined for the second straight quarter after reporting positive comps in the preceding 19 quarters. Moreover, the company is witnessing dismal traffic due to the pandemic.
Bristol-Myers shares have gained +17.5% over the past year against the Zacks Large Cap Pharmaceuticals industry’s rise of +9.3%. The Zacks analyst believes that Bristol-Myers’ blockbuster immuno-oncology drug, Opdivo, and blood thinner drug, Eliquis, will drive growth for the company.
Eliquis is the leading oral anti-coagulant drug and the company continues to witness growth in both Eliquis brand and the market. The label expansion of Opdivo for first-line NSCLC should boost prospects. The addition of sales from Celgene’s drugs (acquired in November 2019) has boosted growth prospects. In particular, the addition of Revlimid has strengthened the oncology portfolio.
The company lifted its earnings guidance for 2020 in hope of a possible recovery in the second half of 2020. Shares have outperformed the industry in the past year. However, Opdivo’s performance was dismal as it faces stiff competition from Keytruda and Tecentriq. Moreover, concerns will rise once Revlimid loses patent protection.
Other noteworthy reports we are featuring today include Netflix (NFLX), Royal Dutch Shell (RDS.A) and U.S. Bancorp (USB).
5 Stocks Set to Double
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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>>>