Today's Must Read
Strategic Buyouts Aid, Elevated Expense Hurts Mastercard (MA)
Sanofi (SNY) Specialty Care Unit Helps Sales, Pipeline Solid
Friday, January 15, 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 Apple (AAPL), Mastercard (MA) and Sanofi (SNY). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Apple shares have outperformed the S&P 500 over the past year (+63.5% vs. +16.2%). The Zacks analyst believes that the company is benefiting from continued momentum in the Services segment, driven by a robust performance of App Store, Apple Music, video and cloud services.
Moreover, demand remains healthy for other Apple devices including iPad, Mac and Wearables. Although Apple didn’t provide any guidance due to uncertainties triggered by the coronavirus pandemic, it expects iPhone sales to grow in the first quarter of fiscal 2021.
Apple’s near-term prospects are bright, driven by new iPhones that support 5G, revamped iPad and Mac line-up of devices, health-focused Apple Watch 6 and robust growth in the Services business. Moreover, a solid balance sheet and strong cash flow generating ability are key catalysts. However, increasing scrutiny and legal woes over App Store are headwinds.
Shares of Mastercard have gained +9.2% in the last six months against the Zacks Financial Transaction Services industry’s gain of +5.1%. The Zacks analyst believes that the company is gaining from solid demand for digital and contactless solutions amid the COVID crisis.
Investment in technology keeps it at the forefront of the rapidly-evolving payments industry. It is well poised to gain from consistent cash generating abilities from operations backed by its growing business volumes. The company’s strong capital position drives investment in business and shareholder value addition.
However, steep costs might stress margins. Its cross-border volumes will remain suppressed due to COVID-19 restriction on travel and entertainment. Its third-quarter earnings missed estimates.
Sanofi shares have lost -2.5% over the past three months against the Zacks Large Cap Pharmaceuticals industry’s rise of +7.2%. The Zacks analyst believes that Sanofi’s Specialty Care unit is on a strong footing, particularly with regular label expansion of Dupixent.
The drug has, in a very short time, become the key top-line driver for Sanofi. Sanofi possesses a leading vaccine operation. Its R&D pipeline is strong and several data read-outs are expected in 2021. However, headwinds include weak performance of the Diabetes unit, generic competition for many drugs and slower-than-expected uptake of core products like Praluent.
Meanwhile, COVID-19 has resulted in slowdown of new patient starts, deferral of some vaccinations, and lower in-pharmacy traffic. Shares have underperformed the industry in the past one year. Estimate movement has been mixed ahead of Q4 earnings. Sanofi has a mixed record of earnings surprise in the recent quarters.
Other noteworthy reports we are featuring today include Comcast (CMCSA), BP p.l.c. (BP) and Altria Group (MO).
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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>>>