Today's Must Read
Disney (DIS) Banks on Disney+ Growth & Reopening of Parks
Steady Investment & Renewable Focus Aid NextEra Energy (NEE)
Wednesday, May 25, 2022
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), The Walt Disney Co. (DIS) and NextEra Energy, Inc. (NEE). 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 >>>
Johnson & Johnson shares have gained +10.0% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +25.0%. The Zacks analyst believes that the company’s diversified busniess makes it relatively resilient amid macroeconomic turmoil.
Its Pharma unit is performing at above-market levels, supported by its blockbuster drugs Darzalex and Stelara, and contribution from newer drugs, Erleada and Tremfya. Sales in the MedTech unit recovered in Q1 and the company is focusing on growing this business through new products.
However, sales in the Consumer segment are being hurt by external supply constraints. J&J is making rapid progress with its pipeline and line extensions. Several pivotal data readouts are expected in 2022.
Headwinds like generic competition and pricing pressure continue. Though J&J has taken meaningful steps to resolve its talc and opioid litigation, they remain an overhang on the stock.
Walt Disney shares have declined -42.1% over the past year against the Zacks Media Conglomerates industry’s decline of -43.1%. The Zacks analyst believes that the company’s profitability is expected to be negatively impacted by higher investments in content, which will drive up programming and production costs at Media and Entertainment Distribution.
Closure of its Asian theme park due to COVID-19 doesn’t bode well for the Parks, Experiences and Products top-line growth. Disney expects this to reduce operating income by up to $350 million in the fiscal third quarter. Disney’s leveraged balance sheet is a concern.
However, the company benefits from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering. Availability in the Nordics, Latin America and other Asian territories is helping it in expanding user base. Revival in Parks, Experiences and Products businesses also hold promise in the long haul.
NextEra Energy shares have gained +3.1% over the past year against the Zacks Utility - Electric Power industry’s gain of +12.8%. The Zacks analyst believes that, through proper execution of organic projects and strategic acquisitions, the company is expanding its operations and efficiently serving more customers. NextEra Energy currently has a lot of renewable projects in its backlog and the number is rising every quarter, which is aiding NextEra to cut emissions.
The merger of Gulf Power and FPL strengthens NextEra Energy’s position in Florida. An improving Florida economy and FPL’s reliable services is expanding its customer volume in every quarter.
NextEra Energy has ample liquidity to meet its near-term debt obligations. However, the nature of its business is subject to complex federal, state and other regulations. Unfavorable weather conditions and an increase in supply costs adversely impact earnings.
Other noteworthy reports we are featuring today include The Home Depot, Inc. (HD), AstraZeneca PLC (AZN), and Anthem, Inc. (ANTM).
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>>>