Today's Must Read
Strength in NIKE's (NKE) Digital Business Aids Top Line
Strategic Acquisitions to Aid Morgan Stanley's (MS) Profits
Friday, March 26, 2021
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Johnson & Johnson (JNJ), Nike, Inc. (NKE) and Morgan Stanley (MS). 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 >>>
Johnson & Johnson shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+31.5% vs. +20.3%). The Zacks analyst believes that J&J’s diversification makes it relatively resilient amid macroeconomic turmoil. The Pharma unit is performing at above-market levels, supported by successful label expansion of blockbuster drugs, Imbruvica, Darzalex and Stelara. Meanwhile, its Consumer Health unit also performed above-market in 2020 while the Medical Devices segment demonstrated a strong second-half recovery.
J&J is also making rapid progress with its pipeline and line extensions. However, headwinds like generic competition and pricing pressure continue. J&J faces numerous lawsuits, which allege personal injuries to patients caused by the use of its products. These lawsuits have resulted in uncertainties.
Nike shares have underperformed the Zacks Shoes and Retail Apparel industry in the past six months (+3.5% vs. +7.0%). The Zacks analyst believes that the company has been witnessing lower revenues at the wholesale business and Nike-owned stores due to the pandemic-led disruptions. Apparently, revenues lagged the Zacks Consensus Estimate in third-quarter fiscal 2021. In fact, revenues declined across all the regions, except for Greater China.
Nonetheless, the top and bottom-line improved year over year in the third quarter, while earnings beat estimates for the third time. Impressively, digital sales of the Nike brand improved double digits across North America, Greater China, and APLA along with triple-digit growth in EMEA.
Despite the uncertainty regarding the impacts of the pandemic, management is confident of its earlier-stated fiscal 2021 view. It continues to anticipate low to mid-teens revenue growth for fiscal 2021.
Morgan Stanley shares have outperformed the Zacks Financial - Investment Bank industry over the past year (+135.6% vs. +110.7%). The Zacks analyst believes that the company’s planned acquisition of Eaton Vance and the buyout of E*Trade Financial are in sync with the company's efforts to focus less on capital markets driven sources. These efforts, along with increasing focus on corporate lending, are likely to support financials, going forward.
Although steadily increasing operating expenses, low rates and its significant dependence on capital-markets driven revenues make us apprehensive, a strong balance sheet is likely to support growth in the upcoming quarters. Further, the company’s robust capital deployments reflect solid liquidity position and will continue enhancing shareholder value.
Other noteworthy reports we are featuring today include Deere & Company (DE), Target Corp. (TGT) and ViacomCBS Inc. (VIAC).
These Stocks Are Poised to Soar Past the Pandemic
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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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>>>