Today's Must Read
Amgen's (AMGN) New Drugs Perform Well, Plans Cost Reduction
Abbott's (ABT) Afinion 2 Boosts Diabetics, Soft Vascular Ails
Tuesday June 26, 2018
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 Facebook (FB), Amgen (AMGN) and Abbott (ABT). 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 >>>
Buy-ranked Facebook’s shares have outperformed the S&P 500 index in the last year, gaining +27.8% vs. +11.8%. The Zacks analyst thinks Facebook is benefitting from robust growth in advertising and user base.
Facebook’s user base of 2.2 billion coupled with Instagram’s 1 billion users provides a huge canvas for advertisers, which, in turn, is driving the top line of the company. Rising mobile conversions on the platform is boosting mobile ad growth. Growing popularity of Stories across all major platforms, with Instagram taking center stage, is a tailwind.
Apart from mobile and video, the monetization opportunities of Messenger, WhatsApp and Oculus and a huge user base are expected to drive growth going ahead. Facebook has a strong balance sheet and generates significant cash flow, which makes it an attractive stock for investors.
Shares of Buy-ranked Amgen have gained +6.6% year to date, outperforming the Zacks Biomedical and Genetics industry, which has declined -7.2% over the same period. Amgen’s newer drugs – Prolia, Xgeva, Blincyto, Vectibix, Kyprolis – are performing well.
Amgen is also progressing with its pipeline and the recent approval of migraine candidate, Aimovig was a huge boost. Amgen’s restructuring plan is making it leaner and more cost efficient. Lower taxes and share buybacks should provide some bottom-line support in 2018. However, Amgen has some challenges in store, given slowdown in sales of mature drugs like Enbrel, Aranesp and Neulasta, which are facing an array of branded and generic competitors.
Volume growth of new drugs may not be enough to offset lost sales due to the decline in mature brands. While Neupogen is already facing U.S. biosimilar competition, Neulasta, Epogen and Sensipar could start facing the same this year. Meanwhile, uptake of key new drug, Repatha has been slow due to payer restrictions.
Abbott’s shares have gained +24.9% over the last year, outperforming the Zacks Medical Products industry, which has gained +10.9% over the same period. The Zacks analyst likes the strong and consistent performance by the company’s EPD and Medical Devices segments.
Also, solid contributions from Diagnostics and Nutrition business are encouraging. The company’s receipt of FDA approval for XIENCE Sierra coronary stent system will help it to revive the dull Vascular business. Within Structural Heart, strong uptake of MitraClip therapy post the national reimbursement approval in Japan is a positive. Abbott’s Alere buyout is another positive.
Synergies from this consolidation in the form of revenues from Rapid Diagnostics have been driving the company’s growth. Meanwhile, the company’s emerging market performance has been extremely promising on several strategic developments. On the flip side, sluggish Vascular business in the United States continues to dent growth.
Other noteworthy reports we are featuring today include Verizon (VZ), Coca-Cola (KO) and 3M (MMM).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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>>>