Today's Must Read
Square (SQ) Banks on Solid Cash App Adoption, Bitcoin Growth
Honda (HMC) to Bank on Strategic Alliances Amid High Capex
Friday, November 13, 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 AbbVie Inc. (ABBV), Square, Inc. (SQ) and Honda Motor Co., Ltd. (HMC). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
AbbVie shares have outperformed the Zacks Large Cap Pharmaceuticals industry in the year to date period (+10.2% vs. -0.1%). The Zacks analyst believes that AbbVie’s key drug, Humira is seeing strong demand trends in the United States.
AbbVie has been successful in expanding labels of its cancer drugs, Imbruvica and Venclexta. It gained approvals for two new drugs with significant potential, Skyrizi and Rinvoq, in 2019. Both are off to a strong start. Allergan’s acquisition has diversified AbbVie’s revenue base into new therapeutic areas, enhancing its long-term growth potential.
However, sales erosion due to direct biosimilar competition to Humira in international markets is a big headwind. Also, the decline in hepatitis C virus (HCV) drug Mavyret’s sales is a concern.
Shares of Square have gained +183.4% over the past one-year period against the Zacks Internet - Software industry’s rise of +85.7%. The Zacks analyst believes that Square’s comprehensive commerce ecosystem, accelerated business growth and entry into bitcoin space remain major positives.
Notably, strong momentum in online channels and growing card-not-present GPV are expected to be tailwinds. Moreover, robust online products, such as Square Online Store, Invoices, Virtual Terminal and eCommerce API are expected to accelerate the GPV growth in the near term.
However, uncertainties related to the COVID-19 pandemic remain concerns. Higher investments and increasing product development expenses might hurt margins. Intensifying competition and foreign exchange fluctuations remain headwinds.
Honda Motor shares have underperformed the Zacks Automotive - Foreign industry in the year to date period (-1.6% vs. +12.8%). The Zacks analyst believes that in anticipation of a slowdown in India and North America, the company expects sales to decline year over year in fiscal 2021.
With the coronavirus pandemic wreaking havoc on the auto industry, sales and earnings of Honda is likely to suffer a major blow, going forward. Further, high capex to develop advanced technologies may also limit its cash flows.
However, the firm’s frequent collaborations with companies like General Motors and Hitachi, among others, are expected to expand business and bolster prospects. Its healthy balance sheet, improving cash flows and investor-friendly moves are other positives.
Other noteworthy reports we are featuring today include Canadian Pacific Railway Limited (CP), Roper Technologies, Inc. (ROP) and Wayfair Inc. (W).
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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>>>