Today's Must Read
Sanofi's (SNY) Drug Dupixent is Key Driver of Sales
Acquisitions, Trading Focus Support Schwab (SCHW) Revenues
Friday, May 21, 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 Cisco Systems, Inc. (CSCO), Sanofi (SNY), and The Charles Schwab Corporation (SCHW). 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 >>>
Shares of Cisco have modestly outperformed the Zacks Computer - Networking industry in the year-to-date period (+18.1% vs. +16.9%). The Zacks analyst believes that Cisco’s Q3 performance benefited from robust adoption of identity and access, advanced threat and unified threat management security solutions amid high growth in Internet traffic.
Ongoing momentum in Webex video conferencing and business productivity offerings on account of COVID-19 induced work-from-home demand environment remains noteworthy. Moreover, strong demand for Catalyst 9000 family of switches amid an expected increase in enterprise IT spending, and recovery across Europe, Middle East and Africa (EMEA), holds promise. The buyout of Acacia Communications also bodes well for the long haul.
Nonetheless, coronavirus crisis-led supply chain constraints are likely to weigh on the performance, at least in the near term. Weak demand for servers remains an added concern.
Shares of Sanofi have gained +11.3% in the year-to-date period against the Zacks Large Cap Pharmaceuticals industry’s gain of +7.7%. Additionally, Sanofi’s Q1 earnings and sales beat estimates. The Zacks analyst believes that Dupixent has become the key top-line driver for Sanofi. With outside U.S. revenues accelerating and multiple approvals for new indications expected in the near future, its sales are expected to be higher.
Further, the 2020 Synthorx and Principia acquisitions have strengthened its R&D pipeline. Its cost-savings and efficiency initiatives are supporting bottom-line growth. However, headwinds include weak performance of the Diabetes unit, generic competition for many drugs and slower-than-expected uptake of products like Praluent. Meanwhile, COVID-19 has resulted in a slowdown in new patient starts of some drugs.
Shares of Charles Schwab have outperformed the Zacks Financial - Investment Bank industry in the last three-month period (+12.3% vs. +9.6%). The company also has an impressive earnings surprise history. In fact, strategic acquisitions have reinforced the company’s position as a leading brokerage player, and will be accretive to earnings and also result in cost savings, per the Zacks analyst.
Moreover, its efficient capital deployment activities reflect a solid balance sheet position. However, continued near-zero interest rates and no chance of any increase in the same in the near term remain a major concern. Also, persistently increasing costs will hurt profitability to some extent. But offering commission-free trading has been leading to rise in client assets and brokerage accounts. This, in turn, will continue improving its trading revenues.
Other noteworthy reports we are featuring today include CVS Health Corporation (CVS), Target Corporation (TGT) and ConocoPhillips (COP).
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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>>>