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Research Daily

Thursday, July 18, 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), NextEra (NEE) and Deere (DE). 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 >>>

Johnson & Johnson's shares have outperformed the Zacks Large Cap Pharmaceuticals industry so far this year (+2.2% vs. -1.2%). J&J beat estimates for earnings and sales in Q2 and raised the 2019 guidance for operational sales growth for the second time this year.

The Zacks analyst thinks J&J is witnessing significant generic/biosimilar headwinds in its Pharma unit in 2019. However, J&J’s sales and earnings growth is expected to accelerate in 2020 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. Headwinds like biosimilar/generic competition and pricing pressure remain. The talc and opioid litigations are overhangs on the stock.

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

Shares of NextEra have outperformed the Zacks Electric Power industry in the past year, gaining +23.3% vs +11.8%. The Zacks analyst thinks NextEra’s investments to strengthen renewable operations through “30 by 30” plan will help the company to continue as a market leader in renewable power generation. Focus on expanding operations in natural gas pipelines and further expansion of business through acquisitions and organic growth have positively impacted earnings. 

However, its nature of business is subject to complex and comprehensive federal, state, and other regulations. Substantial investments are undertaken to ensure the safety of nuclear operations. If planned outages last longer than expected, or there is an unplanned outage normal operations and profitability might be hindered.

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

Deere’s shares have gained +16.2% in the past year, underperforming the Zacks Farm Equipment industry, which has increased +14.3% over the same period. For fiscal 2019, Deere expects net sales to increase 5% year over year. Concerns stemming from the U.S-China trade war and lower commodity prices have led to farmers getting cautious about their equipment purchases.

However, the Zacks analyst thinks the $16 billion aid program for American farmers impacted by the trade war is likely to bolster agricultural equipment sales, which bodes well for Deere. Improving construction markets and the Wirtgen acquisition, which has increased Deere's exposure to global transportation infrastructure, will benefit results.

Additionally, introduction of advanced technologies in its products will aid growth. However, raw material cost inflation, elevated expenses and unfavorable foreign currency impact remain near-term headwinds.  

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

Other noteworthy reports we are featuring today include Vertex (VRTX), Cintas (CTAS) and Canadian Pacific (CP).

More Stock News: This Is Bigger than the iPhone!                  

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. 

Click here for the 6 trades >>

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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