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Research Daily

Tuesday, December 18, 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 Walmart (WMT), Pfizer (PFE) and Adobe (ADBE). 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 >>>

Buy-ranked Walmart’s shares have performed nearly in line with the Zacks Supermarkets industry over the past six months (+8.6% vs. +8.7%), due to its focus on strengthening e-commerce and store operations. The Zacks analyst thinks these factors helped the company retain its sturdy comps trend in third-quarter fiscal 2019, wherein top and bottom lines improved year over year and the latter marked its third consecutive beat.

Notably, U.S. comps rose for the 17th straight time. E-commerce sales surged, courtesy of strong and online grocery performances. These factors encouraged management to raise view. Walmart is also making efforts to improve its International unit by shifting focus to profitable countries.

However, the company’s investment in Flipkart is expected to dent the bottom line. Further, transportation costs and a compelling pricing strategy have been hurting Walmart’s gross margin for a while. Nonetheless, the Flipkart deal bodes well for the long term and should help the company stand firm against Amazon.

(You can read the full research report on Walmart here >>>).

Shares of Pfizer have outperformed its peer group year-to-date (the stock is up +19% over this period vs. a +3% increase for the Zacks Large-Cap Pharmaceuticals industry). The Zacks analyst likes the fact that Pfizer has been working on strengthening its product portfolio through acquisitions and licensing deals.

However, it is facing top-line headwinds in the form of genericization of key drugs, supply challenges in the legacy Hospira portfolio, pricing pressure and rising competition. Nevertheless, new products like Ibrance, cost-cutting efforts, a lower tax rate and share buybacks can support bottom-line growth.

Pfizer also boasts a strong pipeline and looks well positioned to deliver several potential new breakthrough innovative medicines in the next five years, which can drive long-term growth. Bavencio, though approved for two small indications currently, is being considered a key long-term growth driver for Pfizer if it can gain label expansion approvals. Pfizer also recently gained FDA approval for four new cancer medicines, which can boost oncology sales.

(You can read the full research report on Pfizer here >>>).

Adobe’s shares have gained +26.4% year to date, outperforming the Zacks Software industry which has increased +13.5% over the same period. The Zacks analyst thinks Adobe’s fiscal fourth-quarter revenues were benefited by contributions from Marketo acquisition and strong demand for its creative products.

However, higher expenses incurred on acquisitions impacted the bottom line. Nevertheless, Adobe is benefiting from growing subscriptions for its cloud application. It has been making great efforts toward establishing its presence in cloud-related software areas such as documents and marketing.

Adobe’s market position, compelling product lines, continued innovation, solid adoption of Creative Cloud and Adobe marketing cloud are major positives. But lower end-market demand and exposure to Europe remain overhangs.

(You can read the full research report on Adobe here >>>).

Other noteworthy reports we are featuring today include Johnson & Johnson (JNJ), PepsiCo (PEP) and IBM (IBM).

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Mark Vickery
Senior Editor

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>>>

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