Today's Must Read
Oracle (ORCL) Benefits from Strong Uptake of Cloud Solutions
Cloud Initiatives & Growth in S/4HANA Platform Benefit SAP
Friday, July 23, 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 Johnson & Johnson (JNJ), Oracle (ORCL), and SAP SE (SAP). 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 Johnson & Johnson have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+18.6% vs. +18.3%) on the back of the company's rapid progress with its pipeline and line extensions, with several pivotal data readouts and regulatory milestones expected in the near term. The company's beat-and-raise quarterly report in recent days should help sustain this performance momentum.
Successful label expansion of drugs like Imbruvica, Darzalex and Stelara has been supporting its Pharma unit. The Medical Devices segment is demonstrating a strong recovery from weak sales during the early stages of the pandemic. Generic competition and pricing pressure still remain as major headwinds though. Numerous lawsuits, alleging personal injuries to patients caused by the use of its products, are also a concern.
Oracle shares have gained +46% over the last six months against the Zacks Computer Software industry’s gain of +24%, with company benefitting from the ongoing momentum in its cloud business, driven by strong uptake of Oracle Cloud Infrastructure (OCI) services and Autonomous Database offerings.
Healthy adoption of cloud-based applications such as NetSuite Enterprise Resource Planning (ERP), Fusion ERP and Fusion Human Capital Management (HCM) bodes well in the long term. Increased spending, however, on product enhancements amid stiff competition in the cloud market is likely to limit its margin expansion.
Shares of SAP have gained +7.5% in the year to date period against the Zacks Computer Software industry’s gain of +25.5%, however, its Q2 performance reflected continued strength in its cloud business. The Zacks analyst believes that the company’s dominance in providing efficient customer engagement, human capital management as well as interconnected commerce network bodes well.
SAP's alliances with IBM, Microsoft and Verizon favor business prospects. Solid demand for e-commerce, digital supply chain and other cloud platform solutions, also supports growth in the long term. Soft uptake of software licenses and support offerings and increasing investments to enhance cloud-based offerings are major concerns though.
Other noteworthy reports we are featuring today include BP p.l.c. (BP), Cigna (CI) and Walgreens Boots Alliance (WBA).
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>>>