Today's Must Read
AbbVie (ABBV) Pipeline Solid, FDA Warnings for Rinvoq a Woe
Strengthening Demand Aids 3M (MMM), Cost Inflation Hurts
Tuesday, September 7, 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 Facebook, Inc. (FB), AbbVie Inc. (ABBV), and 3M Company (MMM). 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 Facebook have outperformed the S&P 500 in the year to date period (+37.7% vs. +23.2%) on the back of strong outlook for mobile ad revenues, growing adoption of Stories by advertisers across Instagram, core Facebook app and Messenger, and initiatives to improve security.
Facebook’s strong balance sheet and cash flow generating ability is a key catalyst. The company, however, expects revenue growth rate for the third and fourth quarters of 2021 to fall significantly on a sequential basis. Stiff competition from Snap and Twitter in the advertising space as well as increasing regulatory headwinds in the EU and other countries are major concerns.
AbbVie shares have gained +29.8% over the past year against the Zacks Large-Cap Pharmaceuticals industry’s gain of +25.2%. The Zacks analyst believes that AbbVie’s flagship product, Humira, continues to drive revenues. The company has also been successful in expanding the labels of its cancer drugs, Imbruvica and Venclexta.
Allergan’s acquisition has diversified AbbVie’s revenue base into new therapeutic areas, thereby enhancing its long-term growth potential. Sales erosion due to direct biosimilar competition to Humira in international markets is a big headwind though. Per FDA’s order, new warnings about heart-related risks are to be added on Rinvoq’s label and this may hurt its sales in the quarters ahead.
Shares of 3M have gained +7.4% in the last six months against the Zacks Diversified Operations industry’s gain of +18.1%, however, things seem to be improving for the company. The Zacks analyst believes that the company is well-positioned to benefit from its solid product portfolio, marketing activities and shareholder-friendly policies.
The company raised its earnings projection for 2021 to $9.70-$10.10 per share. Revenues are expected to grow 7-10% year over year versus 5-8% mentioned earlier. Headwinds related to raw materials, as well as supply-chain issues are major concerns for 3M in the second half of 2021. Lower demand for respirators and high legal expenses are other major headwinds for the third quarter.
Other noteworthy reports we are featuring today include Broadcom Inc. (AVGO), Lockheed Martin Corporation (LMT) and Edwards Lifesciences Corporation (EW).
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>>>