Back to top

Research Daily

Wednesday May 10, 2017

Today's Research Daily features new research reports on 16 major stocks, including Merck (MRK), Barclays (BCS) and Activision Blizzard (ATVI).

Merck shares have performed largely in-line with the Zacks Large Cap Pharma industry in the year-to-date period (+8.3% for MRK vs. +7.6% for the industry), but the stock has handily outperformed the peer group over the past one year (+17.4% vs. +2.7%). This favorable momentum should continue following the company's better than expected Q1 results when it beat top- and bottom-line estimates and guided higher. The Zacks analyst likes Merck’s new products, especially Keytruda, which should continue to contribute meaningfully to the top line while management's cost-cutting initiatives should help the bottom line. The company has also made significant progress with its pipeline and is working on bringing new products to the market. However, generic competition and pricing pressure will likely remain headwinds as are rising competition in the immuno-oncology market. (You can read the full research report on Merck here >>>)

Barclays have underperformed the Zacks Foreign Banks industry this year, with BCS shares down -1.2% in the year-to-date period vs. +9.3% gain for the industry. Questions about the British bank's capital position, regulatory questions and the strong Pound have all been contributors to this underperformance. The bank's recent quarterly results were fairly strong, reflecting impressive underwriting performance and substantial drop in losses in Non-Core division. The company's efforts to restructure and simplify its operations should help outlook in the long run, but the aforementioned headwinds coupled with Brexit-related uncertainties will likely remain issues for some time.  (You can read the full research report on Barclays here >>>)

Activision Blizzard shares have been strong performers this year, with the stock up +55.3% in the year-to-date period vs. the Zacks gaming industry's +29% gain in that same time period. The strong earnings reports for this quarter as well as the preceding one have added to the stock's momentum. The Zacks analyst likes Activision’s enviable product portfolio and increasing digital revenues, both of which should continue to drive growth. Moreover, the company stands to benefit further from the acquisition of King Digital. The company’s attempts to become a broad-based media company are also prudent. Apart from launching a movie studio and consumer products division, the company is strengthening its presence in the lucrative e-sports market. However, the hit driven and competitive nature of the video game industry begets caution. (You can read the full research report on Activision here >>>)

Other noteworthy reports we are featuring today include Blackstone (BX), Sempra Energy (SRE) and Tyson Foods (TSN).

Sell These Stocks. Now.

Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
See today's Zacks "Strong Sells" absolutely free >>.

Sheraz Mian

Director of Research

Note: SherazMian 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 >>>

Featured Reports

New Upgrades

New Downgrades