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Research Daily

Tuesday, June 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 Pfizer (PFE), Coca-Cola (KO) and VMware (VMW). 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 >>>

Pfizer’s shares have underperformed the Zacks Large-Cap Pharmaceuticals industry year to date (-3.9% vs. -1.2%). Pfizer expects continued strong growth of key product franchises, including Ibrance, Eliquis, and Xeljanz in 2019. The Zacks analyst thinks loss of exclusivity on key drugs in the United States, mainly Lyrica and currency headwinds will significantly hurt sales in 2019.

Other top-line headwinds are weak sales in the sterile injectables portfolio, pricing pressure and rising competition. To offset the threat of generic competition, Pfizer is strengthening its pipeline as well as its oncology portfolio.

Pfizer looks well positioned to deliver several potential new breakthrough innovative medicines in the next five years, which can drive long-term growth. Bavencio is being considered as a key long-term growth driver. Biosimilars are also expected to contribute to growth in 2019.

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

Shares of Coca-Cola have increased +15.1% in the past year, outperforming the Zacks Soft Drinks Beverages industry which has gained +6.3% over the same period. The Zacks analyst thinks this is largely attributable to the effective execution of strategies aimed at evolving into a consumer-centric total beverage company.

This approach has bolstered its quarterly performances as is evident from a robust surprise trend. First-quarter 2019 marked its seventh positive earnings surprise in the last eight quarters and also the seventh straight sales beat. Ongoing productivity efforts and disciplined growth strategies along with robust performance across segments are aiding top and bottom lines.

Innovation and investment in core categories and brands has been the key focus area, which has led to the expansion of retail value share. Moreover, global re-franchising initiatives are expected to boost margins. However, currency rates are likely to significantly mar comparable revenues and operating income in the second quarter and the rest of 2019.

(You can read the full research report on Coca-Cola here >>>).

VMware’s shares have gained +44.4% year to date, outperforming the Zacks Software industry which is up +18.9% over the same period. VMware reported impressive first-quarter fiscal 2020 results. Both earnings and revenues increased on a year-over-year basis. Strong top-line growth was primarily driven by robust performance from NSX, VeloCloud and vSAN product lines.

The Zacks analyst thinks VMware’s dominance in software-defined data center (SDDC) and its expanding customer base in cloud driven by partnerships with the likes of IBM and AWS are major positives. Nevertheless, growth in license bookings has been muted for the last few quarters, owing to customer delays and macro-economic weakness in some key regions. Moreover, VMware’s margins are expected to remain under pressure due to heavy spending. Intensifying competition is also a concern.

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

Other noteworthy reports we are featuring today include Accenture (ACE), NIKE (NKE) and AIG (AIG).

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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>>>

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