Today's Must Read
TJX Companies (TJX) Earnings Gain from Traffic, Costs Hurt
Honda (HMC) Rides on Record High Production Outside Japan
Thursday, August 17, 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 Pfizer (PFE), TJX Companies (TJX) and Honda (HMC). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Pfizer shares have underperformed the peer group as well as the broader market over the past year (the stock is down -5.2% over the last year vs. a +1.7% increase for the Zacks Large-Cap Pharmaceuticals industry and the +12.5% gain for the S&P 500 index) on continued drug pricing uncertainty that have refused to go away even after the election.
Pfizer’s second-quarter results were mixed with earnings beating expectations even as sales came in lower than projected. The drugmaker continues to face headwinds in the form of genericization of key drugs, lost alliance revenues, pricing pressure and rising competition, which are hurting the top line.
But the Zacks analyst thinks that new products like Ibrance, contribution from acquisitions, cost-cutting efforts and share buybacks should help the company achieve its guidance. Pfizer also boasts a strong pipeline and expects approximately 25 to 30 drug approvals over the next five years, including around 15 products that have blockbuster potential.
Shares of TJX Companies have underperformed the Zacks Discount Stores industry over the last one month, gaining +2.3% vs. +3.8%. The company’s second-quarter results exceeded expectations, driven by improved traffic and margin improvements, as well as higher market share. The company also raised its fiscal 2018 earnings guidance.
The Zacks analyst likes the company’s brand enhancing initiative, aggressive store opening strategy and improving e-commerce business. However, the company is facing disappointing comps growth of late. The company is also facing margin pressure due to higher payroll and pension related costs. Currency headwinds are another concern.
Strong Buy-rated Honda’s shares have lagged its auto peers over the last one year losing -7.5% vs. -5.1%. However, Honda reported better-than-expected earnings in the first quarter of fiscal 2018. Both earnings and revenues rose year over year too. The year-over-year increase can be attributed to higher revenues in financial services, motorcycle business operations and foreign currency conversion effects. Also, record-high production in the first-half of calendar year 2017 outside Japan is aiding Honda.
Moreover, the company has been focusing on infrastructural development, new product introductions and car launches in Asia, North and South America. Honda has also planned to launch fuel cell vehicles in U.S. and European markets. These efforts are expected to popularize the company and attract more customers, which in turn will boost the revenue figure. It is also undertaking frequent collaborations in order to expand its business.
Other noteworthy reports we are featuring today include American Electric (AEP), Pioneer Natural Resources (PXD) and Novo Nordisk (NVO).
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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>>>