Today's Must Read
AbbVie's (ABBV) Pipeline Solid, Key Launches in Near Term
Strong Aerospace Business Boosts United Technologies (UTX)
Monday, March 4, 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 Intel (INTC), AbbVie (ABBV) and United Technologies (UTX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Intel’s shares have outperformed the S&P 500 in the past year, gaining +7.1% vs. +3%. Intel is one of the world’s largest manufacturers of semiconductor products. Rising demand witnessed in company’s higher performance products, both in data center and client domains acted as a catalyst.
The Zacks analyst thinks the company is benefiting from robust performance of the DCG, IoT Group, NVM Solutions and PSG. These segments form the crux of Intel’s data-centric business model. The company’s strategy of expanding TAM beyond CPU to adjacent product lines like silicon photonics, fabric, network ASICs and 3D XPoint memory is bearing fruit.
However, a declining trend in PC shipments is detrimental to business prospects of Intel, which continues to depend substantially on PC sales. Further, the company provided a tepid forthcoming outlook. Also, delays in transition to the 10-nm process is a concern. Moreover, intensifying competition remains a headwind.
Shares of AbbVie have lost -15.3% in the past six months, underperforming the S&P 500's decline of -3%. The Zacks analyst thinks AbbVie’s key drug, Humira has been performing well in the United States based on strong demand trends despite new competition.
Moreover, Imbruvica has multibillion dollar potential. Mavyret saw a stronger-than-expected launch and has become a significant contributor to sales. AbbVie has also been successful in expanding approvals for its cancer drugs, Imbruvica and Venclexta.
The company has an impressive late-stage pipeline comprising several products with multibillion-dollar potential expected to be launched in the near term. However, AbbVie’s shares have underperformed the industry this year so far.
Sales erosion due to direct biosimilar competition to Humira in international markets will be a big headwind in 2019. Also, costs to support expected new product/line extension launches should hurt profits in 2019.
Buy-ranked United Technologies’ shares have gained +4.1% over the past three months, outperforming the S&P 500, which has increased +3.8% over the same period. The Zacks analyst thinks strength in commercial and military aftermarket businesses and impressive contribution from its acquired Rockwell Collins business sales will likely continue to boost United Technologies' near-term revenues.
Also, improved revenues and cost-cutting measures are expected to enhance profitability, going forward. Backed by these positives, the company has given bullish full-year 2019 revenue guidance.
The company intends to become more competent on the back of meaningful business acquisitions. Notably, the Rockwell Collins buyout is likely to boost sales in 2019. Moreover, separation of the company's existing business will create higher values and customer satisfaction.
Other noteworthy reports we are featuring today include Simon Property Group (SPG), Eni (E) and FirstEnergy (FE).
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
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>>>