Today's Must Read
P&G (PG) Gains from Higher Coronavirus-Led Product Demand
Improving End Markets to Drive Deere (DE), Input Costs Ail
Tuesday, February 23, 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), The Procter & Gamble (PG) and Deere (DE). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Apple shares have outperformed the broader S&P 500 index over the past year (+69.1% vs. +22.3%), though the stock has been under pressure lately as sentiment has soured on Tech stocks in a rising interest rate environment. The Zacks analyst believes that Apple’s prospects are bright, driven by new iPhones that support 5G, revamped iPad and Mac line-up of devices, health-focused Apple Watch and robust growth in the Services business.
Apple’s first-quarter fiscal 2021 results reflected continued momentum in the Services segment, driven by a robust performance of App Store, Cloud Services, Music, advertising, AppleCare and payment services. Moreover, iPad, Mac and Wearables contributed strongly to the quarterly results.
Further, iPhone sales increased due to strong demand for iPhone 12 devices. China and Japan iPhone sales increased significantly. Apple did not provide any guidance due to uncertainties triggered by the pandemic.
Shares of Procter & Gamble have lost -7.6% in the last six months against the Zacks Soap and Cleaning Materials industry’s loss of -8.8%. The Zacks analyst, however, believes that the Procter & Gamble stock has been benefiting from its robust earnings and sales surprise trend.
While it has reported an earnings surprise for the past several quarters, revenues topped estimates for the third straight time in the fiscal second-quarter. Further, earnings and sales improved on a year over year basis.
Margins benefited from cost leverage and productivity initiatives, while sales were aided by strength across all segments, robust shipments, pricing and mix. Driven by the robust results, it raised outlook for fiscal 2021. However, currency headwinds are likely to affect results in fiscal 2021. Stiff competition also remains a woe.
Deere shares have gained +26.1% over the past three months against the Zacks Farm Equipment industry’s gain of +29.1%. The Zacks analyst believes that a pick-up in commodity prices bodes well for agricultural equipment demand. The Construction and Forestry segment is likely to gain on strong demands from the housing market.
Deere’s first-quarter fiscal 2021 earnings and revenues both improved year over year and beat the respective Zacks Consensus Estimate. Backed by improving conditions in the farm and construction sectors, the company expects net income for fiscal 2021 between $4.6 billion and $5 billion.
However, higher steel costs and freight costs are expected to dent the company’s margins in the near term. Nevertheless, Deere’s focus on investing in new products with advanced technologies positions it well for growth.
Other noteworthy reports we are featuring today include T-Mobile US (TMUS), Target (TGT) and Gilead Sciences (GILD).
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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>>>