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Research Daily

Monday, March 20, 2017

Today's Research Daily features new research reports on 17 major stocks, including Merck (MRK), General Electric (GE), MasterCard (MA) and NVIDIA (NVDA).

Merck’s shares have gained +21.2% over the last one year, outperforming the Zacks Large Cap Pharma industry which has gained +7.5% over the same period. Merck’s fourth-quarter results were mixed. However, the Zacks analyst likes Merck’s new products, especially Keytruda, which should continue to contribute meaningfully to the top line.

Merck will continue to focus on cost-cutting initiatives to drive the bottom line. The company has also made significant progress with its pipeline and is working on bringing new products to the market. Merck has also been pursuing acquisitions and business development deals to boost its pipeline. However, generic competition and pricing pressure will continue to pressurize the top line. (You can read the full research report on Merck here.)

General Electric shares have lagged the market over the last three months on concerns about the conglomerate's order backlog and continued weakness in the energy end-market. This issue notwithstanding, the company has done an excellent job of its plan to reduce its exposure to finance and get back to its industrial and engineering roots. General Electric’s multi-billion deal with Baker Hughes is likely to boost the Oil & Gas segment revenues.

General Electric further aims to grow its 3D manufacturing business to $1 billion by 2020 through opportune acquisitions. To that end, it is enjoying strong momentum in the power and aviation end markets, partly offset by continued weakness in the energy space. With a healthy ROI from the Alstom deal, the company has offered a bullish guidance for 2017 and expects a steady rise in operating profits. (You can read the full research report on General Electric here.)

MasterCard has outperformed the Zacks Financial Services Transaction sector over the last one year (up +22.2% vs. +21.2%) and is nearly neck to neck with rival Visa (up +22.3%) Estimates for 2017 have also been rising steadily. The company remains well positioned for growth on the back of its solid market position, ongoing expansion and digital initiatives and significant opportunities from the secular shift towards electronic payments.

Notably, the company has filed for four Blockchain patents as it tries to integrate blockchain-based transactions in its own systems. The proposed acquisition of a major stake in VocaLink will strengthen its electronic payment capabilities. However, escalating costs, a challenging forex environment and legal issues remain concerns. (You can read the full research report on MasterCard here.)

NVIDIA shares have surged over the last one year, gaining in excess of +212% versus the Zacks Semiconductor - General industry’s +36.5% gain. The analyst likes NVIDIA’s sustained efforts toward attaining a robust position in several emerging industries such as Artificial Intelligence (AI), deep learning and driverless cars.

Furthermore, by expanding its business avenues, the company will be able to reduce its dependency on the PC industry, which is currently declining. NVIDIA’s innovative product pipeline and strength in gaming and high-end notebook GPUs remain the positives. The company’s focus on GRID platforms can increase GPU adoption in data centers, giving it an advantage against its competitors. (You can read the full research report on NVIDIA here.)

Other noteworthy reports we are featuring today include PayPal (PYPL), Simon Property Group (SPG) and Target (TGT).

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Sheraz Mian

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 >>>

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