Today's Must Read
New Drugs Like Ibrance to Counter Pfizer's (PFE) Generic Woes
Abbott (ABT) to Gain More on St Jude Synergy, Raises Outlook
Tuesday, July 25, 2017
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 Oracle (ORCL), Pfizer (PFE) and Abbott (ABT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-rated Oracle’s shares have outperformed the Zacks Technology Sector year-to-date, gaining +32% vs. +18%. The company’s offerings in SaaS and PaaS have gained significant momentum in the past few quarters, which improves the company's competitive position in the red hot cloud space, particularly against salesforce.com and Workday.
The Zacks analyst likes the company’s growing cloud market share and sees the positive momentum in this area as a notable top-line growth driver. Moreover, Oracle continues to win new customers in HCM, ERP and CX. However, high investments in IaaS will affect gross margin expansion in the near-term. Further, a strong U.S. dollar remains a headwind.
Pfizer’s shares have underperformed the peer group as well as the broader market over the past year (the stock is down -9.5% over the last year vs. a -1.2% decline for the Zacks Large-Cap Pharmaceuticals industry and the +13.9% gain for the S&P 500 index) on continued drug pricing uncertainty that have refused to go away even after the election.
These headwinds notwithstanding, the Zacks analyst is pointing out that Pfizer is strengthening its product portfolio as well as pipeline through acquisitions and licensing deals. However, genericization of key drugs, lost alliance revenues, pricing pressure and rising competition remain potent headwinds. Mounting competition in the immuno-oncology market is also a significant concern.
The company has a mixed record of earnings surprises in recent quarters. Estimate movement has been mixed ahead of its second-quarter earnings release.
Buy-rated Abbott’s shares have outperformed the Zacks Medical sector in the year-to-date period (the stock is up +32.3% vs. +13.1% gain for the sector) on the back of greater appreciation for the company's strategic repositioning through acquisitions/divestitures. A case in point is the St. Jude Medical buyout that complements the company cardiovascular devices business.
All in all, market participants like management's strategic focus on core therapeutic areas. Abbott’s second-quarter 2017 performance was promising with the bottom line exceeding expectations. Although revenues were in line with estimates, the raised guidance for 2017 is indicative of brighter prospects. On the flip side, the analyst identifies weakness in the nutrition business in China and sluggish growth in the Venezuelan market as areas of concern.
Other noteworthy reports we are featuring today include Alphabet (GOOGL), eBay (EBAY) and Schlumberger (SLB).
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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>>>