Today's Must Read
Apple (AAPL) Banks on Services to Counter Weak iPhone Demand
Goldman (GS) Exhibits Cost Control; Legal Issues Linger
Monday, May 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 Johnson & Johnson (JNJ), Apple Inc. (AAPL) and The Goldman Sachs Group, Inc. (GS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Johnson & Johnson’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry so far this year (+7.4% vs. -1.1%). J&J’s sales and earnings growth is expected to accelerate in the long run, supported by contribution from new drugs like Tremfya and successful label expansion of cancer drugs like Imbruvica and Darzalex and immunology drug, Stelara.
J&J is also making rapid progress with its pipeline and line extensions. It has already gained FDA approval for two new drugs in 2019, Balversa and Spravato. Meanwhile, share buybacks and restructuring initiatives should provide bottom-line support. However, headwinds like biosimilar/generic competition and pricing pressure remain.
Shares of Apple have outperformed the broader S&P 500 index on a year-to-date basis (+19.8% vs. +13.4%). Apple’s services segment, in particular, is expected to grow strongly on solid App Store sales and increasing adoption of Apple Music and Apple Pay.
But there are significant headwinds for Apple. Weak iPhone demand, particularly in China and emerging economies, is a headwind. Further, the company continues to lose share in the smartphone market due to stiff competition from Chinese handset makers. Moreover, the ongoing U.S.-China trade war doesn’t bode well for the company.
Goldman Sachs' shares have outperformed the Zacks Financial - Investment Bank industry so far this year, gaining +18.1% vs +7.8%. Goldman’s first-quarter 2019 results reflected solid financial advisory revenues and lower expenses, partly offset by disappointing performance of Institutional Client Services unit and lower underwriting business. Notably, Goldman has been embroiled in the scandal related to the multibillion-dollar 1Malaysia Development Bhd (1MDB), which is a major concern.
Nevertheless, Goldman’s well-diversified business and focus to capitalize on growth opportunities through strategic moves, along with cost-control efforts, will continue to strengthen the overall business.
Other noteworthy reports we are featuring today include Accenture plc (ACN), IBM Corp. (IBM) and Netflix, Inc. (NFLX).
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>>>