Today's Must Read
ExxonMobil (XOM) Banks on Guyana Discoveries, Refining Weak
S&P Global (SPGI) Benefits from Acquisitions Amid High Debt
Monday, October 5, 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 Amgen (AMGN), Exxon Mobil (XOM) and S&P Global (SPGI). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amgen shares have outperformed the Zacks Biomedical and Genetics industry in the year to date period (+3.9% vs. -3%). The Zacks analyst believes that while Amgen’s drugs like Prolia, Evenity, Repatha, Aimovig, Otezla and biosimilars are driving sales, increasing competition for its legacy products is hurting the same.
Meanwhile, sales of Amgen’s in-office administration products are being hurt by COVID-19 related business disruption. Nonetheless, Amgen boasts a strong biosimilars portfolio, which can drive long-term growth.
Amgen is also progressing with its pipeline while regularly pursuing “external opportunities” such as the acquisition of Otezla and the stake in China's BeiGene. Amgen also expects several important clinical data readouts from its innovative pipeline in the second half of 2020. However, pricing and competitive pressure are concerns.
Shares of Exxon Mobil have lost -50.8% over the past year against the Zacks Integrated International Oil industry’s fall of -48.7%, reflecting the tough oil price environment. The Zacks analyst believes that major discoveries in the Stabroek Block have enhanced prospects for ExxonMobil's upstream businesses.
ExxonMobil’s bellwether status in the energy space, optimal integrated capital structure that has historically produced industry-leading returns and management’s track record of capex discipline across the commodity price cycle make it a relatively lower-risk energy sector play. Notably, the company estimates gross recoverable resource of more than 8 billion oil-equivalent barrels from offshore Guyana discoveries.
Recently, after getting government approval, ExxonMobil decided to proceed with the Payara field offshore development in Guyana. However, the firm’s recent third-quarter 2020 update hints at a challenging quarter. The company expects weak refining margins to have hurt its downstream business. Moreover, the integrated firm expects the drop in realized gas prices to have affected its upstream operations.
S&P Global shares have gained +42.9% over the past six months against the Zacks Business Information Services industry’s rise of +9.7%. The Zacks analyst believes that the company is well poised to gain from growing demand for business information services.
Buyouts have helped it innovate, increase differentiated content and develop new products. Effective management execution has helped it generate solid cash flow which is utilized for growth initiatives. Dividend payments and share buybacks boost investors' confidence and positively impact earnings per share.
However, S&P Global remains vulnerable to proceedings, investigations and inquiries with respect to the ratings provided, leading to legal charges, damages or fines. High debt may limit the company's future expansion and worsen its risk profile.
Other noteworthy reports we are featuring today include Royal Dutch Shell (RDS.A), HSBC Holdings (HSBC) and Lululemon Athletica (LULU).
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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>>>