Today's Must Read
Biogen's (BIIB) Spinraza Shines, Core Competition Heats Up
Strong Crossover & Truck Sales Drive General Motors (GM)
Thursday, June 28, 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 Johnson & Johnson (JNJ), Biogen (BIIB) and General Motors (GM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Johnson & Johnson’s shares have lost -5.1% in the last three months, underperforming the -2.4% decline of the Zacks Large Cap Pharmaceuticals industry. J&J’s sales growth has accelerated since the second half of 2017 backed by higher sales in the Pharmaceutical segment and improving performance in Medical Devices & Consumer segments.
Though quite a few key products in J&J’s portfolio like Remicade and Concerta are facing generic competition, the Zacks analyst thinks new products in all segments, successful label expansion of cancer drugs like Imbruvica and Darzalex and contribution from recent acquisitions will continue to drive top-line growth. J&J also enjoys a robust multi-year pipeline of new drugs and line extensions.
Meanwhile, share buybacks and restructuring initiatives should provide bottom-line support. Headwinds like generics, pricing pressure, sluggish growth in the Medical Device segment and soft global market conditions remain.
Shares of Biogen have underperformed the Zacks Biomedical and Genetics industry year to date (-9.7% vs. -9.5%). Biogen has a strong position in the MS market with a wide range of products - Avonex, Tysabri, Tecfidera & Plegridy. The Zacks analyst likes its efforts to diversify beyond MS to other areas like Alzheimer’s, Parkinson's and stroke, among others.
Meanwhile, its newest drug, Spinraza, has multi-billion dollar potential. Biogen’s efforts to regularly in-license assets to build its pipeline are also encouraging. It has many assets in its pipeline, which have transformative potential. Multiple data read-outs are expected this year.
However, the launch of Ocrevus by Roche is beginning to have a negative impact on MS franchise sales in the United States, mainly on Tysabri. Also, Spinraza’s moderating trends in the United States is a concern. Also, recently, Biogen announced the decision to withdraw Zinbryta from the markets due to growing safety concerns.
Buy-ranked General Motors’ shares have outperformed the Zacks Domestic Automotive industry over the last three months, increasing +11.1% vs. +10.9%. General Motors expects weak used car pricing, a challenging pricing environment in the U.S. and China as well as more pressure on commodity costs.
Also, the company is facing a high inventory level of passenger cars. It is working toward bringing the inventory down by cutting production. Moreover, the company has been forced to scale down or shut its manufacturing operations in some regions due to production constraints such as high costs and unfavorable currency translation effects.
However, the company’s capital allocation strategy, initiatives to make its vehicles more advanced, safer and fuel efficient and focus on technology development are likely to benefit it.
Other noteworthy reports we are featuring today include Valero Energy (VLO), GGP Inc. (GGP) and Ameriprise Financial (AMP).
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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>>>