Today's Must Read
Salesforce (CRM) Rides On Partnerships & Portfolio Strength
Acquisitions, Investments in Technology Aid Mastercard (MA)
Thursday, October 18, 2018
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including AstraZeneca (AZN), salesforce.com (CRM) and Mastercard (MA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
AstraZeneca’s shares have gained +8% year to date, outperforming the Zacks Large Cap Pharmaceuticals industry which has gained +3.2% over the same period. AstraZeneca’s newer drugs like Lynparza, Tagrisso and Brilinta should keep contributing to the top line while several launches are underway across each of the therapeutic areas, Oncology, CV metabolism and Respiratory.
Meanwhile, cost-cutting initiatives should drive the bottom line. AstraZeneca also has a promising late-stage pipeline that includes immuno-oncology candidates. Imfinzi is a key drug in the pipeline. The company has a positive record of earnings surprises in the recent quarters. Estimates have remained stable ahead of the company’s Q3 earnings release.
Nevertheless, AstraZeneca’s core products like Nexium, Crestor and Seroquel are facing generic competition, which is hurting sales growth. The diabetes franchise also faces stiff competition while pricing pressure is hurting sales in the Respiratory franchise.
Strong Buy-rated Salesforce’s shares have gained +38.9% so far this year, handily outperforming the Zacks Computer - Software industry which gained +19% over the same period. Salesforce’s diverse cloud offerings and strong spending on digital marketing remain the catalysts.
Management is extremely optimistic about enhancement of customer experience that has aided growth of the cloud segment. Additionally, strategic acquisitions and the resultant synergies are anticipated to prove conducive to growth over the long run.
Furthermore, the company’s move of utilizing other data center operators like Amazon and Alphabet’s geographical reach to expand its international business is commendable and will help it in achieving its targeted $23 billion sales mark by 2022. However, stiff competition, currency fluctuations and an increase in investments for international expansions and data centers could negatively impact near-term profitability.
Shares of Mastercard have increased +37.3% over the past year, significantly outperforming the Zacks Financial Transaction Services industry’s rally of +22.2%. The company is poised for growth, given its solid market position, ongoing expansion and digital initiatives plus significant opportunities from the secular shift toward electronic payments.
The buyouts of VocaLink and NuData Security complement efforts to participate in new payment flows, and enhance safety and security offerings. The company has seen the Zacks Consensus Estimate for 2018 earnings being revised upward over the last 60 days. However, escalating costs, higher incentives and rewards will put pressure on its bottom line.
Other noteworthy reports we are featuring today include Eni (E), Lam Research (LRCX) and Koninklijke Philips (PHG).
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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>>>