Today's Must Read
Sturdy Diabetes Arm, Mazor Purchase to Aid Medtronic (MDT)
Lowe's (LOW) Omnichannel and Pro Customers to Boost Sales
Friday, November 23, 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 Amazon (AMZN), Medtronic (MDT) and Lowe’s (LOW). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amazon’s shares have outperformed the broader market year to date by a wide margin (the stock is up +29.7% vs. the -0.9% decline for the S&P 500 as a whole). The Zacks analyst thinks Amazon’s strengthening retail position thanks to its expanding global footprint and distribution strength remains its key growth driver. Moreover, robust Prime program and its benefits will continue to aid Amazon’s retail business.
Also, the rapid expansion of grocery services via Prime is a major positive. Additionally, the company’s growing brick and mortar presence is a tailwind. Increasing Amazon Web Services (AWS) regions and its growing adoption will continue to aid the company’s cloud momentum. And a rising number of Alexa compatible devices are positive.
Currently, the company is boosting its holiday initiatives, which are likely to aid its performance in the holiday season. However, management has given a weak sales outlook for this season, mainly due to changes in Indian holiday timing. This remains a concern for investors. Also, intensifying competition in the cloud computing market and heavy investment in fulfillment centers are headwinds.
Shares of Medtronic have outperformed the Zacks Medical Products industry over the past year, gaining +11.7% vs. -2.8%. In this regard, the company exited second-quarter of fiscal 2019 on a solid note, with better-than-expected earnings and revenue performances. This highlighted sustainability across groups and regions, in addition to displaying successful achievement of synergy targets.
The Zacks analyst thinks gradually stabilizing CRHF market holds promise. The company is also focusing on geographical diversification of its businesses. This apart, the company has been seeing certain favorable developments in its Diabetes business.
Overall, the raised 2019 guidance increases investors’ confidence on the stock. Meanwhile, the impending acquisition of Mazor Robotics which is expected to fortify Medtronic's position in spine surgery provides cause for optimism. Yet escalating costs and expenses continue to weigh on Medtronic’s bottom line.
Lowe’s shares have gained +11.5% over the past year, underperforming the Zacks Building Products industry, which has remained flat over the same period. The Zacks analyst emphasizes that Lowe’s boasts a sturdy top-line performance, which has been rising year-on-year since the past several quarters. Notably, sales have been gaining from the company’s pro-customer centric approach as well as robust marketing and merchandising efforts.
Strong digital presence has also been fueling performance. Further, Lowe’s expects robust opportunities in the booming U.S. home improvements market, which gained from strong real residential investment and rise in home price during third-quarter fiscal 2018.
However, Lowe’s plans to exit Orchard Supply Hardware business and Mexico retail operations along with shuttering certain non-core businesses and stores have led to higher pre-tax charges. Such moves weighed on the outlook for fiscal 2018, while causing the company’s shares to decline in the past three months. Management now projects total sales growth of approximately 4%, down from the prior estimate of a rise of 4.5%.
Other noteworthy reports we are featuring today include Target (TGT), Fiserv (FISV) and Hilton (HLT).
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It's not the one you think.
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>>>