Today's Must Read
Ventilator Sales Aid Medtronic (MDT), Volume Recovery Starts
CME Group (CME) Banks on Improving Top Line, Expenses Hurt
Tuesday, September 29, 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), Medtronic (MDT) and CME Group (CME). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amazon shares have lost some ground lately, but they have otherwise been standout perforers in the year-to-date period (+71.8% vs. +4.1% for the S&P 500 index). The Zacks analyst points out that Covid-19 pandemic has further cemented the online retailer's leadership position.
Amazon has been gaining from coronavirus-led spike in online orders. Further, solid growth in its online stores sales is driving the top-line growth. Moreover, surge in online grocery shopping is a major positive. Additionally, Further, strong adoption rate of AWS is aiding the company’s cloud dominance.
Moreover, expanding AWS services portfolio is continuously helping Amazon in gaining further momentum among the customers. Additionally, improving Alexa skills and features are positives. Also, expanding smart home products offerings are tailwinds. However, accelerating coronavirus related expenses remain risks for the company’s margin expansion in the near term.
Shares of Medtronic have lost -4.6% over the past year against the Zacks Medical Products industry’s fall of -1.7%. The Zacks analyst believes that all major business groups of the company have been contributing to consistent revenue growth at CER, which highlights sustainability across groups and regions.
In the first-quarter of fiscal 2021, there was a faster than expected sales recovery. Procedure volumes began to recover this quarter in multiple markets globally. Also, the company drove market share gains in a number of large businesses. It saw significant growth in ventilators sales in the first quarter.
Based on the ongoing strong business recovery trend, Medtronic expects its fiscal second-quarter sales of most of the core segments to exceed or remain in line with the company average. On the flip side, the company registered significant year-over-year decline in these figures. Barring Respiratory, Gastrointestinal, & Renal, there were dismal performances across all business segments and geographies.
CME Group shares have lost -2.9% over the past six months against the Zacks Securities and Exchanges industry’s rise of 12.6%. The Zacks analyst believes that CME Group’s strong market position, driven by a variety of derivative product lines bodes well.
Efforts to expand and cross sell through strategic alliances, acquisitions, new product initiatives and a stable global presence are encouraging. Product innovation and growing proportion of volume from customers outside the United States have been aiding results. The company intends to focus more on over-the-counter clearing services.
However, escalating expenses due to higher technology cost are likely to put pressure on margin expansion. Diversified product portfolio is significantly exposed to volatile interest rate, firm government regulations and limited credit availability in unstable capital and credit market. Also, stiff competition also poses financial risk.
Other noteworthy reports we are featuring today include Chevron (CVX), Intuitive Surgical (ISRG) and Duke Energy (DUK).
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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>>>