Today's Must Read
Robust Demand Aids Lockheed (LMT), F-35 program's Cost Hurts
Alphabet (GOOGL) Rides on Diversification; Legal Troubles Ail
Monday, September 23, 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 Bristol-Myers Squibb (BMY), Lockheed Martin (LMT) and Alphabet (GOOGL). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Bristol-Myers Squibb’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry in the past six months (+6.5% vs. -3%). The Zacks analyst thinks that Bristol-Myers’ lead immuno-oncology drug, Opdivo, continues to drive growth. Label expansion of the drug into additional indications should further boost the top line.
Empliciti and Sprycel are also performing well on label expansion. Moreover, Bristol-Myers has presence in other core therapeutic areas, including immunoscience and cardiovascular. Blood thinner drug, Eliquis, is expected to drive further growth, propelled by increased share in the novel oral anticoagulant market.
Meanwhile, the impending acquisition of Celgene will broaden the company’s oncology portfolio with the addition of the blockbuster drug, Revlimid. However, pipeline setbacks are concerns. The failure of the part 2 of the Checkmate-227 study was disappointing, given the potential in the NSCLC market.
Shares of Lockheed Martin have gained 7.9% in the past three months, outperforming the Zacks Aerospace Defense industry’s rise of 5.1%. The Zacks analyst believes that Lockheed Martin enjoys strong demand for its high-end military equipment in domestic and international markets.
Lockheed Martin is also the largest U.S. defense contractor with a platform-centric focus that guarantees a steady inflow of follow-on orders from a leveraged presence in the Army, Air Force, Navy and IT programs. As a result, it witnesses solid order growth. In a year’s time, Lockheed Martin has outperformed the industry.
However, the company’s higher debt-to-equity ratio shows that the stock is highly leveraged when compared with its industry. Lockheed Martin also faces intense global competition for its broad portfolio of products and services. Additionally, suspension of the Turkish contract for the F-35 program may hurt the company’s operating results.
Alphabet’s shares have gained 17.7% year to date, outperforming the Zacks Internet Services industry’s rise of 3.8% over the same period. The Zacks analyst believes that Alphabet will continue to be driven by improving search & advertising revenues, hardware and AI.
The company’s strong focus on bolstering its presence in the cloud market on the back of expanding data centers and robust cloud offerings continues to aid growth. Its initiatives toward elimination of bad ads and introducing useful major search updates are tailwinds.
Google’s robust mobile search is also a positive. Its strong focus on innovation of its AI techniques and the home automation space is aiding business growth. However, the company’s growing litigation issues, growing competition and increased spending on YouTube might hurt profitability.
Other noteworthy reports we are featuring today include Alibaba Group (BABA), Allergan (AGN) and Kinder Morgan (KMI).
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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>>>