Today's Must Read
Growth in S/4HANA Platform & Cloud Initiatives Benefit SAP
Exploration Progress, Debt Reduction to Aid Freeport (FCX)
Thursday, February 18, 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 Abbott Laboratories (ABT), SAP SE (SAP) and Freeport-McMoRan (FCX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Abbott shares have outperformed the Zacks Medical Products industry in the year to date period (+16.2% vs. +8.8%). The Zacks analyst believes that the company has been seeing improvements in testing and procedure volumes across its hospital-based businesses.
At the same time, its consumer-facing businesses like diabetes care, nutrition and established pharmaceuticals (EPD), are catching up pace. In Adult Nutrition, the company reported strong double-digit growth on robust sales of Ensure and Glucerna.
In 2020, the company received U.S. approval of Freestyle Libre 2 and CE Mark for Libre 3 and Libre Sense Glucose Sport. Yet, Abbott’s performance was disappointing especially in Pediatric Nutrition, Cardiovascular and Neuromodulation.
Shares of SAP have lost -21.7% in the last six months against the Zacks Computer Software industry’s gain of +14.9%. The Zacks analyst believes that SAP is well-positioned to benefit from robust uptake of S/4HANA, and SuccessFactors Employee Central solutions.
Momentum witnessed by Ariba and Fieldglass solutions is also noteworthy. SAP's alliances with IBM, Microsoft, Accenture and Verizon favor business prospects. The company is also well-poised to gain from healthy contribution from Sapphire Ventures.
Further, high demand for e-commerce, digital supply chain, Qualtrics and cloud platform solutions, augurs well over the longer haul. Nevertheless, soft uptake of software licenses and support offerings remains a headwind. Rise in investments to enhance cloud-based offerings are likely to weigh on margins in near term.
Freeport-McMoRan’s shares have gained +61.8% over the past three months against the Zacks Mining – Non Ferrous industry’s rise of +44.1%. The Zacks analyst expects the company to gain from progress in exploration activities that will boost its production capacity.
It is also well-positioned to benefit from automotive electrification. Furthermore, higher copper prices are also expected to support its margins. Freeport's efforts to reduce debt are also encouraging.
However, it faces operational challenges in certain mines. Declining sales volumes is another concern. Moreover, lower volumes across North and South America have led to higher unit costs across these operations.
Other noteworthy reports we are featuring today include Advanced Micro Devices (AMD), Kraft Heinz (KHC) and American International Group (AIG).
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
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>>>