Today's Must Read
Loan Growth Supports Wells Fargo (WFC) Amid Low Rates
Contract Wins to Benefit General Electric (GE) Amid Pandemic
Thursday, December 10, 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 Roche Holding AG (RHHBY), Wells Fargo & Company (WFC) and General Electric Company (GE). 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 >>>
Shares of Roche have gained +12.6% over the past year against the Zacks Large Cap Pharmaceuticals industry’s increase of +7.8%. While the company’s sales in the first quarter were strong, the metric declined in the second quarter and again stabilized somewhat in the third. The Zacks analyst believes that although growth in Ocrevus, Perjeta, Tecentriq and Hemlibra maintained momentum, COVID-19 disruptions and biosimilar competition for Herceptin, MabThera and Avastin weighed on the solid performances.
Nevertheless, the Diagnostics division was boosted by the launch of diagnostic products for COVID-19 and should sustain this uptrend in the next few quarters. Label expansion of Tecentriq into additional indications is a positive and should surge sales.
Wells Fargo shares have underperformed the Zacks Banks - Major Regional industry in the year to date period (-46.0% vs. -21.3%). The Zacks analyst believes that Wells Fargo's revenues remain under pressure due to low interest rates and a volatile fee income trend. Also, rising expenses in providing benefits to clients amid coronavirus concerns might curb bottom-line growth. Legal hassles also remain a concern.
Nevertheless, the company's efforts to enhance compliance and risk-management capability, along with streamlining activities seem encouraging. Also, strong loans and deposits balance depicts robust capital position. Moreover, given strong liquidity position, the company carries less credit risk in case of any economic downturn. Improving credit quality remains a tailwind.
General Electric shares have outperformed the Zacks Diversified Operations industry over the past three-month period (+91.4% vs. +23.3%). The Zacks analyst believes that the company is poised to gain from its portfolio-restructuring program, expansion in digital business, efforts to deleverage balance sheet and solid liquidity position in the quarters ahead.
However, the pandemic-related market challenges — especially for Healthcare, Aviation and Power — related to the pandemic remain concerning. Its measures to deal with the pandemic might be a relief. In addition, forex woes might hurt in the quarters ahead.
Other noteworthy reports we are featuring today include Microsoft Corporation (MSFT), Exxon Mobil Corporation (XOM) and Intuit Inc. (INTU).
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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>>>