Today's Must Read
Digital Transformation and Acquisitions Aid salesforce (CRM)
Glaxo's (GSK) Cancer Pipeline Grows Amid Rising Competition
Friday, November 20, 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 UnitedHealth Group (UNH), salesforce.com (CRM) and GlaxoSmithKline (GSK). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
UnitedHealth shares have outperformed the Zacks Medical Insurance industry in the year to date period (+13.4% vs. +5.5%). The Zacks analyst believes that the company’s top line is bolstered by new deals, renewed agreements and expansion of service offerings. Its numerous acquisitions bode well for its inorganic growth profile.
Expansion of the company’s health services segment provides significant diversification benefits. UnitedHealth remains well poised to benefit from its government business, comprising both Medicaid and Medicare Advantage. A solid balance sheet and consistent cash flow generation not only encourage investments in business but also add shareholder value.
The raising of 2020 earnings guidance instills investor confidence. However, the company is witnessing a slowdown in its international operations. Increased joblessness stemming from the COVID-19 induced volatilities might hurt Commercial membership.
Shares of salesforce.com have gained +62.1% over the past year against the Zacks Computer Software industry’s rise of +33.9%. The Zacks analyst believes that salesforce is benefiting from a robust demand environment as customers are undergoing a major digital transformation.
The rapid adoption of its cloud-based solutions is driving demand for its products. salesforce’s sustained focus on introducing more aligned products as per customer needs is driving its top-line. Continued deal wins in the international market is another growth driver.
Furthermore, the recent acquisition of Tableau positions the company to be a leader in business analytics for actionable results in everything from operations to HR. However, stiff competition from Oracle and Microsoft is a concern. Besides, unfavorable currency fluctuations along with increasing investments in international expansions and data centers are an overhang on near-term profitability.
Glaxo’s shares have lost -9.7% over the past six months against the Zacks Large Cap Pharmaceuticals industry’s rise of +1.2%. The Zacks analyst believes that several new drug/line extension approvals that are expected in 2021 would boost the company’s top line in the long term.
Glaxo’s new and specialty products like Nucala, Trelegy Ellipta, Shingrix and Juluca, are delivering a strong performance, making up for a decline in Established Pharmaceuticals due to generic erosion. Glaxo has made significant progress in its oncology pipeline and doubled its assets in development since 2018.
However, pricing pressure and competitive dynamics due to generic competition for key drug, Advair, are hampering sales of Glaxo’s respiratory products. Competitive pressure on HIV drugs has risen. Slowdown in vaccination rates hurt sales of its key vaccines, mainly Shingrix, in 2020.
Other noteworthy reports we are featuring today include Square (SQ), Blackstone Group (BX) and American Electric Power (AEP).
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.
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>>>