Today's Must Read
BD Medical Arm Aids Becton, Dickinson (BDX) Amid Forex Woes
Applied Materials (AMAT) Rides on Foundry & Logic Spending
Tuesday, August 20, 2019
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features updated research reports on 16 major stocks, including Estee Lauder (EL), Becton, Dickinson (BDX) and Applied Materials (AMAT). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.
Estee Lauder’s shares are up +43.5% in the past year, outperforming the Zacks Cosmetics industry, which is up +25.9% over the same period. The Zacks analyst thinks that this is largely attributable to the company’s robust sales and earnings history, backed by growth across most brands as well as sales channels.
The trend continued in the fourth quarter of fiscal 2019, wherein the top and the bottom line surpassed estimates and rose year on year. Performance in the quarter and fiscal 2019 was supported by growth in emerging markets, strong travel retail and online sales. Additionally, management provided an optimistic view for fiscal 2020 and for the first quarter.
However, the company is mindful regarding certain headwinds such as soft retail trends in the United States and the U.K., costs related to Brexit, impact of tariffs in China as well as moderation of sales in China and travel retail network. Moreover, adverse currency rates are a concern.
Shares of Becton, Dickinson have outperformed the Zacks Dental Supplies industry in the past year, losing -0.6% vs. -5.3%. Becton, Dickinson, also known as BD, exited the fiscal third quarter on a strong note. The Zacks analyst likes the solid show by the core BD Medical and Interventional units.
Domestic revenues increased year over year in the quarter under review, driven by segmental strength. Growth was observed in China and EMEA. Expansion in gross and operating margins is another encouraging factor. BD kept its fiscal 2019 guidance intact. However, sluggishness in the core Life Sciences unit raises concern. International sales also declined in the quarter.
Contraction in operating margins is a concern. Management expects unfavorable foreign currency to partially mar BD’s bottom line in fiscal 2019. Stiff competition in the MedTech space adds to the company’s woes.
Applied Materials’ shares have outperformed the Zacks Semiconductor Equipment - Wafer Fabrication industry in the past three months (+14% vs. +11.8%). Applied Materials reported fiscal third quarter results wherein both earnings and revenues topped the estimates.
The company witnessed solid customer spending in foundry and logic, thanks to IoT, communications, automotive, power and sensor applications. The company also experienced solid momentum across United States and Taiwan during the reported quarter. The Zacks analyst remains optimistic about the price elasticity of NAND, which is expected to bolster NAND customer spending in the near term.
The company’s expanding etch footprint bodes well for its semiconductor portfolio. However, market uncertainties remain a headwind. Softness in semiconductor and display markets on account of slowdown in memory and display customers’ spending is major concern.
Other noteworthy reports we are featuring today include Regeneron (REGN), Aspen (AZPN) and HollyFrontier (HFC).
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Note: Our Director of Research 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>>>