Today's Must Read
Eli Lilly (LLY) Makes Significant Pipeline Progress
Focus on Core Operations Aid Citigroup (C), Legal Woes Linger
Wednesday, December 16, 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 Mastercard (MA), Eli Lilly (LLY) and Citigroup (C). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Mastercard shares have outperformed the Zacks Financial Transaction industry in the year to date period (+11.7% vs. +6.3%). The Zacks analyst believes that the company is gaining from solid demand for digital and contactless solutions amid the COVID crisis.
The company executed several acquisitions to supplement organic efforts and diversify revenues over the years, which helped expand its addressable markets and boost core product solutions. It is well poised to gain from consistent cash generating abilities from operations backed by its growing business volumes.
Mastercard’s strong capital position drives investment in business and shareholder value addition. However, steep costs might stress margins. Its cross-border volumes are likely to remain suppressed due to COVID-19 restriction on travel and entertainment. Its third-quarter earnings missed estimates.
Shares of Eli Lilly have gained +33.6% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +2.8%. The Zacks analyst believes that the company’s revenue growth will be driven by higher demand for drugs like Trulicity, Taltz, and others.
Lilly is making significant pipeline progress including its efforts to make therapies to treat COVID-19. It is regularly adding promising new pipeline assets through business development deals.
However, generic competition for several drugs, rising pricing pressure in the United States on key drugs such as Trulicity, and price cuts in some international markets like China, Japan and Europe are some top-line headwinds.
Citigroup’s shares have gained +12.6% over the past six months against the Zacks Major Regional Banks industry’s rise of +16.4%. The Zacks analyst believes that a diverse business model, focus on core operations and streamlining of international businesses will continue to support Citigroup’s growth.
Citigroup’s streamlining efforts, along with strategic investments in core business, bode well. Also, net interest revenues will likely be supported by loan growth and mix, despite low interest rates environment. Further, shrinking expense base due to the winding-down of legacy assets is aiding the bank’s bottom-line expansion.
Moreover, manageable debt level makes Citigroup less risky in case of any economic downturn. However, pending litigation issues might keep legal expenses elevated for the company. Additionally, a subdued consumer banking business might dent Citigroup's fee income base to some extent.
Other noteworthy reports we are featuring today include AstraZeneca (AZN), Advanced Micro Devices (AMD) and Square (SQ).
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You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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>>>