Today's Must Read
New Drugs like Ibrance to Counter Pfizer's (PFE) Generic Woes
Carnival (CCL) Rides on Booking Trends, Currency Woes Remain
Wednesday, September 13, 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 Apple (AAPL), Pfizer (PFE) and Carnival (CCL).These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Apple’s shares are up +39.5% in the year-to-date period, handily outperforming the S&P 500 (up +13.3%) and the Zacks Technology sector (up +20.7%). The Zacks analyst thinks Apple’s enriched product portfolio that now includes the new iPhones, Watch 3 and 4K TV will help the stock sustain momentum against S&P 500 going forward. This, along with the company's $1-billion investment for acquiring original content and its plan to break into film distribution market will further boost services’ revenues.
Additionally, foray into fast-growing technologies like AI & AR/VR are long-term growth catalysts. However, the new iPhone X at $999 is quite pricey, particularly for markets like China and India. Moreover, slight delay in launching the product as compared with iPhone 8 and 8 Plus, reflects supply chain issues. This can be a concern during the upcoming holiday season. Moreover, intensifying competition from cheaper Chinese handset-makers cannot be ignored.
Shares of Pfizer have underperformed the peer group as well as the broader market year to date (the stock is up +12.1% over this period vs. a +19.3% increase for the Zacks Large-Cap Pharmaceuticals industry and the +13.4% gain for the S&P 500 index). Pfizer has been working on strengthening its product portfolio through acquisitions and licensing deals. However, Pfizer continues to face headwinds in the form of genericization of key drugs, lost alliance revenues, pricing pressure and rising competition which is hurting the top-line.
Though Pfizer’s growing immuno-oncology portfolio offers strong potential, many of these assets are in early stage of development. Nonetheless, 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.
Carnival’s shares have outpaced the Zacks Leisure and Recreation Services industry in the past year, gaining +51% vs. +38.6%. The Zacks analyst likes the addition of new ships to its fleet given burgeoning demand for cruise travel in 2017. Additionally, Carnival is well positioned for continued earnings growth, given the current strength in its bookings along with pricing trends for the year.
Notably, its brand building efforts together with other marketing activities are driving bookings. Its strategy of growing beyond familiar itineraries and capitalizing on fast growing markets is likely to further drive growth. Meanwhile, estimates have been stable lately ahead of its fiscal third quarter earnings release and the company has positive record of earnings surprises in recent quarters.
However, adverse forex translations, higher costs along with macroeconomic issues in key operating regions remain headwinds. A potential increase in fuel costs can also hamper its profitability. (You can read the full research report on Carnival here >>>).
Other noteworthy reports we are featuring today include T. Rowe Price (TROW), Apache (APA) 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>>>