Today's Must Read
Broadcom (AVGO) Rides on Portfolio Strength & Acquisitions
Starbucks' (SBUX) Strong Global Footprint to Drive Growth
Wednesday, January 9, 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 Amgen (AMGN), Broadcom (AVGO) and Starbucks (SBUX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amgen’s shares have gained +9.7% in the past year versus the Zacks Biomedical and Genetics industry's decline of -20.7%. Amgen’s newer drugs – Prolia, Xgeva, Blincyto, Kyprolis – are performing well. Amgen is also progressing with its pipeline and the approval of migraine candidate Aimovig was a huge boost.
The Zacks analyst thinks its strong biosimilars pipeline could be an important long-term growth driver. Amgen’s restructuring plan is making more cost efficient. Lower taxes and share buybacks should provide some bottom-line support. However, Amgen faces challenges related to its more mature products such as launch of competing biosimilar versions of Neulasta and Epogen, further sales erosion of Neupogen and Aranesp and increasing competitive pressures on Enbrel.
Meanwhile, uptake of key new drug, Repatha has been slow due to payer restrictions. Nonetheless, estimates have gone up ahead of the Q4 earnings release. Amgen has a positive record of earnings surprises in recent quarters.
Shares of Broadcom have underperformed the Zacks Electronics - Semiconductors industry over the past year, losing -10.2% vs. a -9.7% decline. Broadcom is a premier designer, developer and global supplier of a broad range of semiconductor devices.
The Zacks analyst thinks the company is benefiting from strong demand of its wireless solutions and expanding product portfolio, which makes it well-positioned to address the needs of rapidly growing technologies like IoT and 5G. Strong ties with leading OEMs across multiple target markets will help the company to gain key insights into the requirements of customers.
Further, Broadcom is a leading player in the semiconductor market based on its multiple target markets, accretive acquisitions and strong cash flow. Nonetheless, the company faces intensifying competition and integration risks due to frequent acquisitions. The company’s leveraged balance sheet and customer concentration continue to be headwinds.
Starbucks’s shares are up +13.6% over the past three months, outperforming the Zacks Food & Restaurants industry, which is up +5.4% over the same period. The Zacks analyst thinks robust Americas and U.S. comparable store sales bode well for the company.
Starbucks’ largest market the United States, reported comps growth of 4%, which marks the strongest gain in the past five quarters. Also, the company’s operating fundamentals such as solid global footprint, successful innovations, best-in-class loyalty program and digital offerings are encouraging. Again, digital initiatives like mobile order/pay, delivery services and third-party loyalty partnerships can further stimulate robust sales trends in the Americas.
Additionally, Starbucks has teamed up with Nestle SA to revitalize their respective coffee domains. However, operating margin contraction over the past few quarters has been a major concern. Being a retail restaurant, Starbucks is dependent on consumer discretionary spending environment.
Other noteworthy reports we are featuring today include Citigroup (C), Kinder Morgan (KMI) and Carnival (CCL).
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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>>>