Today's Must Read
Amgen (AMGN) Counts on New Drugs Amid Rising Biosimilar Woes
Honda (HMC) to Gain From Vision 2030 Plan and Model Mix
Wednesday, February 20, 2019
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), Amgen (AMGN) and Honda (HMC). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Walmart’s shares have outperformed the Zacks Supermarkets industry over the past six months (+6.3% vs. +5.7%), 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 fourth-quarter fiscal 2019, wherein top and bottom lines improved year over year and the latter marked its fourth consecutive beat. Notably, U.S. comps rose for the 18th straight time.
Further, e-commerce sales surged on the back of strong Walmart.com and online grocery performances. E-commerce sales are expected to rise nearly 35% in fiscal 2020.
Walmart is also making efforts to improve its International unit by shifting focus to profitable countries. To this end, the company’s investment in Flipkart is however expected to dent the bottom line in fiscal 2020. Transportation costs and a compelling pricing strategy are threats to gross margin. Nonetheless, the Flipkart deal bodes well for the long term.
Shares of Amgen have gained +2.4% in the past year versus the Zacks Biomedical and Genetics industry's decline of -16.3%. Amgen beat expectations for both earnings and sales in the fourth quarter. However, its 2019 guidance reflects a year-over-year decline.
The Zacks analyst thinks that while Amgen’s newer drugs — Prolia, Xgeva, Blincyto, Kyprolis — will drive sales, biosimilar and brand competition faced by its legacy products will create pressure on the top line in 2019. Meanwhile, uptake of key drug, Repatha has been slow due to payer restrictions and the recent price cut will hurt sales going forward.
Amgen is progressing with its pipeline and the approval of Aimovig was a huge boost. In the past five years, The company has launched nine products, including two in new therapeutic areas. Amgen boasts a strong biosimilars pipeline, which could be an important long-term growth driver for the company. Its restructuring plan is making it leaner and more cost efficient.
Buy-ranked Honda’s shares have outperformed the Zacks Foreign Automotive industry over the past six months, losing -9.2% vs. -15.2%. In third quarter of fiscal 2019, Honda’s revenues improved year over year.
The Zacks analyst likes the company’s Vision 2030 plan which aims to boost coordination between research and development as well as procurement and manufacturing of its products that will aid the company to reduce developmental costs and focus more on electric vehicles.
Also, its revenues streams in motorcycle and financial segments and favorable model mix are adding to profits. The company’s collaboration with other companies to develop autonomous and electric vehicles will allow it offer new technologies and expand business.
Other noteworthy reports we are featuring today include TransCanada (TRP), Ameren (AEE) and TransUnion (TRU).
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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>>>