Today's Must Read
Buyouts, Assets Balance Aid BlackRock (BLK), High Costs Ails
Square (SQ) Banks on Solid Cash App Adoption, Bitcoin Growth
Monday, January 11, 2021
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 (RHHBY), BlackRock (BLK) and Square (SQ). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Roche shares have modestly underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+3.6% vs. +4%). The Zacks analyst believes that label expansion of Tecentriq into additional indications should drive sales. Roche’s recent efforts to diversify its portfolio should reap benefits. Strategic acquisitions should strengthen the pipeline.
Roche’s performance in 2020 was pretty ho-hum due to the COVID-19 adversity and competition from biosimilars. While sales in the first quarter were strong, the metric declined in the second quarter and again stabilized somewhat in the third.
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 maintain this uptrend.
Shares of BlackRock have gained +36.9% in the last six months against the Zacks Investment Management industry’s gain of +27.7% on the back of expanding footprint and market share.
Its initiatives to restructure the equity business along with its inorganic growth efforts will likely keep supporting top-line growth. Further, solid assets under management (AUM) balance are expected to continue to aid revenue growth despite the ongoing concerns related to the coronavirus outbreak.
Given a solid liquidity position, BlackRock’s capital deployments look sustainable. However, persistently increasing expenses (owing to higher administration costs) are expected to hurt the bottom line. Also, the company’s high dependence on overseas revenues makes us apprehensive.
Square shares have gained +30.4% over the past three months against the Zacks Internet Software industry’s rise of +13.9%. The Zacks analyst believes that Square is gaining on strong Cash App engagement and its expanding customer base.
Further, rising bitcoin revenues owing to robust Cash App are contributing well to the top-line. Also, strong adoption of Cash Card is a major positive. Additionally, the company’s strengthening momentum in online channels and growing card-not-present GPV are expected to remain tailwinds.
Moreover, robust online products, such as Square Online Store, Invoices, Virtual Terminal and eCommerce API are expected to accelerate the GPV growth in the near term. Further, solid acquisition of net-new transacting active Cash App customers is likely to continue driving the top line growth. However, higher investments and increasing product development expenses, and COVID-19 induced uncertainties remain concerns.
Other noteworthy reports we are featuring today include Infosys (INFY), Sinopec (SNP) and Moody's (MCO).
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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>>>