Today's Must Read
Colgate's (CL) 2012 Restructuring Program to Drive Growth
Mako Platform Buoys Stryker (SYK) amid Product Recall Issue
Monday, September 25, 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 Mondelez (MDLZ), Colgate-Palmolive (CL) and Stryker (SYK). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Mondelez's shares have lost +10.8% in the last three months, compared with the -7.6% dip of the Zacks Food Preparation industry. However, the Zacks analyst likes Mondelez’s attractive portfolio of iconic brands, commanding presence in impulsive categories and fast-growing emerging markets. Mondelez’s margins have remained constantly strong backed by cost savings and productivity gains.
The company has a mostly positive record of earnings surprises in recent quarters. However, Mondelez’s volumes have been hurt since 2014 by the elasticity impact from higher pricing and category weakness because of soft consumer demand. Moreover, with a significant portion of its sales coming from international markets, currency is a significant top-line headwind.
Shares of Buy-rated Colgate-Palmolive are up +8.8% in the year-to-date period, outperforming the Zacks Consumer Staples sector, which has gained +8.6% over the same period. The Zacks analyst likes the progress made on its 2012 Restructuring Program and expects additional opportunities identified under the program to help reach the higher end of its previously stated cost and savings view.
Moreover, the company has been infamous among investors with its meet or beat earnings track record. However, the company’s sales missed expectations for the fifth straight quarter in second-quarter due to continued softness in North America and challenges in Asia-Pacific. Further, the company lagged sales estimates in 16 out of the trailing 17 quarters.
Nevertheless, the company remains focused on four fundamentals to boost profits including, increased spending on advertisements; innovation across portfolio; higher spends on e-commerce business and aggressively maximizing productivity. Also, its disciplined capital strategy bodes well. Estimates have been stable lately.
Stryker’s shares have gained +21.2% over the last year, outperforming the Zacks Medical Products industry, which has increased +8.4% over the same period. Stryker announced the voluntary product recall of the Oral Care lineup recently. The recall is likely to adversely impact the company’s sales and operating income. Stryker exited the second quarter on a solid note, beating the Zacks Consensus Estimate on both counts. Solid performance in the MAKO platform drove revenues.
Upbeat guidance for the full year instills investor confidence on the stock. Stryker has a diversified product portfolio. Continued strong demand for hemorrhagic and ischemic stroke products and neuro-powered instruments boosted sales in the neurotechnology segment. However, volatility in foreign currency exchange is likely to impede revenue growth. Stryker also faces supply-side headwinds and has been grappling with issues in the spine business for long.
Other noteworthy reports we are featuring today include Nike (NKE), Fifth Third Bancorp (FITB) and Estee Lauder (EL).
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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>>>