Today's Must Read
Oracle (ORCL) Benefits from Expanding Cloud & IoT Offerings
Project Streamline Aids Morgan Stanley's (MS) Profitability
Monday, September 11, 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 Gilead (GILD), Oracle (ORCL) and Morgan Stanley (MS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Gilead’s shares have outperformed the Zacks Biotech industry year to date, gaining +20.7% vs. +17.1%. Gilead is all set to acquire Kite Pharma and enter the CAR T therapy space which represents immense potential at this juncture and a potential approval of lead candidate axi-cell will be a significant boost for Gilead’s prospects which have dampened of late.
The Zacks analyst emphasizes that an acquisition announcement was on the cards as Gilead had a strong cash balance and the decline in the once lucrative hepatitis C (HCV) market due to competitive pressure made the company look for strategic alternatives. Gilead is known for its presence in the HCV market because of its blockbuster HCV drugs, Sovaldi and Harvoni.
However, the HCV franchise is under pressure because of competition and pricing issues. Meanwhile, the HIV franchise maintains momentum driven by the rapid adoption of TAF-based regimens in the U.S. and EU.
Shares of Oracle have outperformed the Zacks Technology Sector year-to-date, gaining +35.7% vs. +19%. Oracle is benefiting from significant momentum in the SaaS and PaaS offerings. The Zacks analyst thinks the company’s growing cloud market share will continue to drive top-line growth for the foreseeable future.
The recent collaboration with Mitsubishi and addition of AI and machine learning features in Internet of Things (IoT) Cloud offerings is encouraging. NetSuite continues to expand customer base and was recently named as a leader among B2B commerce suites for midsize organizations by Forrester Wave report.
Meanwhile, estimates have been stable lately ahead of the company's Q1 earnings release. The company has mixed record of earnings surprises in recent quarters. However, higher investments on IaaS will affect gross margin expansion in the near-term.
Buy-rated Morgan Stanley’s shares have outperformed the Zacks Finance sector over the last one year, gaining +39.3% versus the sector’s +18.9% increase. The performance was supported by the company’s impressive earnings surprise history. Earnings have surpassed expectations in each of the trailing four quarters.
The Zacks analyst likes the company’s efforts to offload its non-core assets to lower balance sheet risk and cost saving initiatives (Project Streamline), which will likely lead to improvement in profitability. These initiatives, along with enhanced capital deployment should boost investors’ confidence in the stock.
However, continued fall in corporate loan balances leading to decline in interest income remains a near-term concern for the company. (You can read the full research report on Morgan Stanley here >>>).
Other noteworthy reports we are featuring today include HCA Healthcare (HCA), Expedia (EXPE) and Kroger (KR).
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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>>>