Today's Must Read
NVIDIA (NVDA) Rides on Solid Automotive & Datacenter Demand
Opdivo Fuels Bristol-Myers' Growth (BMY) Amid Stiff Competition
Wednesday, January 16, 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 Procter & Gamble (PG), NVIDIA (NVDA) and Bristol-Myers (BMY). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Procter & Gamble’s shares outperformed the Zacks Soap and Cleaning Materials industry in the past three months, gaining +12.4% vs +5.8%. The Zacks analyst thinks that this can be attributed to the company’s robust earnings history, having outpaced estimates for 14 straight quarters when it reported first-quarter fiscal 2019. Moreover, earnings grew year over year.
Also, sales beat estimates, though it remained flat due to adverse currency fluctuations – which acted as a major deterrent in the first quarter and is likely to remain a concern in the second quarter. The company has been witnessing strained margins for last few quarters due to higher commodity and shipping costs, adverse currency, increased business investments and aggressive pricing from private-label products. Soft baby care business is also a concern.
Nevertheless, the company is focused on improving productivity and cost savings to boost margins. Its focus on product improvement, packaging and marketing initiatives is encouraging.
Shares of NVIDIA have underperformed the Zacks General Semiconductor industry over the past year (down -33.3% vs. -11.7%). The Zacks analyst thinks NVIDIA is gaining from its sustained efforts toward attaining a robust position in several emerging industries.
Growth opportunities in ray-traced gaming, rendering, high-performance computing, artificial intelligence (AI) and self-driving cars are expected to be the company’s consistent tailwinds. Rapid adoption of GPUs in the automotive and datacenter markets is a key growth driver.
However, the company is experiencing a rough time due to a string of weaknesses plaguing the semiconductor market recently. The end of the cryptocurrency mining boom weakened demand for its GPUs. The company is hurt by weakness in the Gaming segment, which is affected by an excess inventory of midrange Pascal products.
Bristol-Myers’ shares have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year, losing -19.6% vs. -1.2%. The Zacks analyst thinks Bristol-Myers' blockbuster immuno-oncology drug Opdivo’s performance is being boosted by the uptake in new indications - first line renal cell carcinoma and adjuvant melanoma.
The company is looking to expand Opdivo’s label further which should boost performance. Eliquis is expected to drive growth, owing to increases in market share in the novel oral anticoagulant (NOAC) market. The label expansion of other drugs like Sprycel and Empliciti also bode well for the company and should boost performance. The recently announced acquisition of Celgene should further strengthen the company’s oncology franchise.
However, the FDA extension of the PDUFA date for the sBLA seeking approval of Opdivo+Yervoy as a treatment for first-line non-small cell lung cancer was disappointing given the market potential. Competition is stiff as well.
Other noteworthy reports we are featuring today include ADP (ADP), Deere (DE) and Ecolab (ECL).
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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>>>