Today's Must Read
Schlumberger's (SLB) Q1 Earnings Meet Estimates, Fall Y/Y
Honeywell (HON) Beats Q1 Estimates, Strong Demand Raise Hope
Tuesday April 25, 2017
Today's Research Daily features new research reports on 16 major stocks, including Johnson & Johnson (JNJ), Schlumberger (SLB) and Honeywell (HON).
Johnson & Johnson shares have gained +8.9% over the last year, widely outperforming the large-cap pharma space (down -1.1%). J&J reported mixed Q1 results, beating on earnings but missing on sales. This was the second consecutive sales miss for J&J due to a slowdown in pharmaceutical product sales.
While the company is faced with a number of headwinds like unfavorable currency movements, increased competition from generics, pricing pressures and an uncertain global macroeconomic backdrop, the Zacks analyst believes that JNJ's diversified business model, deep product pipeline, lack of cyclicality and financial strength position it for continued momentum going forward.
Also, the potential Actelion buyout, though expensive, will bolster J&J’s long-term growth. However, in 2017, growth in J&J’s Pharma segment is expected to suffer as key growth drivers have slowed down due to competition. (You can read the full research report on Johnson & Johnson here.)
Shares of Schlumberger underperformed the Zacks Oil and Gas Field Services industry over the last one year, losing -6.4% vs. the sector’s -4.3% decline. The Zacks analyst likes the continuous and effective cost-management initiatives of the company. The Schlumberger-Cameron merger will support technology-driven growth, going forward. The company’s focus on international markets also deserves appreciation.
Moreover, Schlumberger’s first-quarter earnings were in line with expectations. This may be attributed to improvement in directional drilling works in North America. However, the bottom line decreased substantially on a year-over-year basis owing to slowdown of drilling works in the international market. Moreover, Schlumberger projected 2017 to be a challenging year for business outside North America. (You can read the full research report on Schlumberger here.)
Honeywell shares have outperformed the diversified operations industry gaining +12.1% vs. +2.1% in the year-to-date period. Moreover, Honeywell reported solid first-quarter 2017 results. The Zacks analyst like the company’s continuing efforts on increasing its presence in high-growth regions. Additionally it is building a robust pipeline of new products and has regularly fine-tuned its portfolio to focus on core businesses.
Diligent focus on working capital management, free cash flow generation and a conservative balance sheet remain key positive attributes. However, Honeywell expects a tepid demand pattern for its business jets and mobile scanners in 2017 due to sluggish global growth, volatility in crude oil prices and a tempered Chinese economy. High R&D expenditure to fend competition and stay ahead of technological obsolescence contracts margin and reduces bottom-line growth. (You can read the full research report on Honeywell here.)
Other noteworthy reports we are featuring today include Alphabet (GOOGL), Sherwin-Williams (SHW) and SunTrust Banks (STI).
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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 >>>