Wednesday, January 17, 2024

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 Adobe Inc. (ADBE), IBM Corp. (IBM) and Sanofi (SNY). 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 >>>

Adobe’s shares have outperformed the Zacks Computer - Software industry over the past year (+75.1% vs. +59.1%). The company is benefiting from strong demand for its creative products -- Creative Cloud, Document Cloud and Adobe Experience Cloud -- which are driving top-line growth. Rising subscription revenues and solid momentum across mobile apps are major positives.

Additionally, growth in emerging markets and robust online video creation demand remain tailwinds. Solid demand for Adobe’s commerce offerings and growing adoption of Acrobat. Adobe’s strong market position, compelling product lines and continued innovation remain positives. Also, its growing generative AI efforts remain a plus.

However, ongoing tensions between Russia and Ukraine remain major headwinds for its Digital Media segment. High acquisition expenses do not bode well for its margin expansion.

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

Shares of IBM have outperformed the Zacks Computer - Integrated Systems industry over the past year (+24.8% vs. +17.7%). The company is witnessing net sales growth backed by rising demand of its hybrid cloud and AI solutions. Acquisition of Software AG’s iPaaS (integration platform-as-a-service) business will further bolster its AI and cloud offerings.

This buyout will accelerate watsonx data ingestion capabilities and enrich customers with additional API management features. Necessary steps to capitalize on the growing integration software landscape will likely boost revenue. Strong free cash flow generation provides the financial flexibility required for strategic investments in the evolving business environment.

However, frequent acquisitions have escalated integration risks. Buyouts have negatively impacted the company’s balance sheet in the form of high levels of goodwill and net intangible assets. Foreign exchange volatility remains a major concern.

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

Sanofi’s shares have gained +7.7% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +18.9%. The company’s specialty care unit is on a strong footing, particularly with the outstanding growth trajectory of Dupixent. Dupixent has become the key top-line driver for Sanofi as it enjoys strong demand trends across all approved indications and geographies.

Sanofi possesses a leading vaccine portfolio, which has become the primary top-line driver. Its R&D pipeline is strong. The company has also launched several new drugs in the past couple of years and is expanding its pipeline through M&A deals. Sanofi plans increased investments in R&D and new product launches in 2024.

However, its profit outlook for 2024 and 2025, announced on the Q3 conference call, was disappointing. Headwinds include the weak performance of diabetes drugs and regular negative pipeline developments.

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

Other noteworthy reports we are featuring today include Enbridge Inc. (ENB), Duke Energy Corp. (DUK) and Itaú Unibanco Holding S.A. (ITUB).

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>>>