Today's Must Read
End-Market Strength, Global Business Aid Thermo Fisher (TMO)
Prudent Cost Control & Diversification Supports Goldman (GS)
Wednesday, November 28, 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 Johnson & Johnson (JNJ), Thermo Fisher (TMO) and Goldman Sachs (GS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-ranked Johnson & Johnson's shares have outperformed the Zacks Large Cap Pharmaceuticals in the past six months, gaining +20% vs. +14.5%. J&J’s Pharma segment is performing better than the market in 2018 despite the impact of biosimilars on Remicade sales. Also, the Medical Devices and Consumer units are seeing improving organic growth trends.
J&J has raised its full-year organic sales growth outlook thrice this year. Though quite a few key products in J&J’s portfolio like Remicade and Concerta are facing generic competition, the Zacks analyst thinks new products in all segments, successful label expansion of cancer drugs like Imbruvica and Darzalex and contribution from recent acquisitions will continue to drive top-line growth. J&J enjoys a robust multi-year pipeline of new drugs and line extensions.
Meanwhile, share buybacks and restructuring initiatives should provide bottom-line support. Headwinds like generics, pricing pressure and soft global market conditions remain.
Shares of Buy-ranked Thermo Fisher have outperformed the Zacks Medical Instruments industry in the past three months (+0.9% vs. -10.2%). The company saw strength in all end markets categorized by customer type or geography in the last reported quarter. It particularly registered solid international performance with strong growth in Asia-Pacific including China.
Also, a series of product launches with progress in precision medicine initiatives aided its performance. The Zacks analyst thinks the company’s recently-closed acquisition of Advanced Bioprocessing business from BD should add complementary cell culture products to Thermo Fisher’s bioproduction offerings.
The company’s initiative to buy Gatan to boost electron microscopy suite buoys optimism. On the flip side, Thermo Fisher’s business segments are getting impacted by unfavorable business mix. Also, competitive headwinds and escalating costs pose a threat.
Buy-ranked Goldman Sachs’ shares have lost -19.8% in the past three months, underperforming the -14.2% decline of the Zacks Investment Banking industry. However, the company boasts an impressive earnings surprise history, surpassing expectations in all the trailing four quarters.
The Zacks analyst thinks the company’s well-diversified business and focus to capitalize on growth opportunities through strategic moves along with cost-control efforts will continue to strengthen the overall business. Notably, Goldman has been entangled in the recent heightened scandal related to the multibillion-dollar 1Malaysia Development Bhd (1MDB), which is a major concern.
While declining revenues from Institutional Client Services division remain a hindrance to the bottom-line expansion, the launch of its online retail bank, Marcus with an aim to enter Britain’s cash savings account market, will support growth.
Other noteworthy reports we are featuring today include Oracle (ORCL), 3M (MMM) and Accenture (ACN).
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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>>>