Today's Must Read
Improving Retention Rate, Pay-TV Resizing Aids DISH (DISH)
Micron (MU) Banks on Rebound in Demand for DRAM Solutions
Tuesday, October 1, 2019
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Pfizer (PFE), DISH Network (DISH) and Micron Technology (MU). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Pfizer’s shares have underperformed the Zacks Large-Cap Pharmaceuticals industry in the past six months (-16.3% vs. -4.7%). The Zacks analyst believes that the Consumer Healthcare joint venture with Glaxo, the Array acquisition and the pending merger of Upjohn unit with Mylan, if successful, will make Pfizer a smaller company with a diversified portfolio of innovative drugs and vaccines.
The smaller Pfizer should see better revenue growth as the Lyrica loss of exclusivity cliff will go away. Pfizer expects continued strong growth of key brands like Ibrance and Eliquis and biosimilars to drive sales in the second half.
However, currency headwinds, Lyrica LOE, weak sales in the sterile injectables portfolio and pricing pressure are top-line headwinds in 2019. Moreover, unfavorable changes in recommendation guidelines for Prevnar 13 and unfavorable FDA updates to the Xeljanz U.S. label may hurt sales of these key drugs in the second half.
Shares of DISH Network have gained 36.4% year to date, outperforming the Zacks Cable Television industry’s rise of 30.5% over the same period. The Zacks analyst believes that DISH is suffering from subscriber loss in the Pay-TV business, primarily due to stiff competition and cord-cutting.
Also, increasing programming and content expenses as well as higher retransmission fees are hurting profitability. Nevertheless, the company’s efforts to diversify its business from being a pure-play satellite-TV operator to an Internet TV operator are noteworthy. Sling TV subscriber base is also expanding, which is a positive.
Further, the company’s focus on acquiring and retaining subscribers, to boost profits over the long term, is expected to drive growth. Further, DISH announced that it will enter the U.S. wireless market as the fourth, nationwide, facilities-based network competitor.
Micron’s shares have gained 8.2% in the past three months, outperforming the Zacks Semiconductors industry’s rise of 3.7%. The Zacks analyst believes that the company is well-poised to benefit from the resurgence in DRAM demand, backed by a progress in customer inventory adjustments in the cloud, graphics and PC markets.
Moreover, its focus on increasing the mix of high-value solutions in its portfolio is a boon. Further, introduction of server processors that supports higher memory densities is likely to fuel demand for its solutions. Also, the company’s decision to cut down on capital expenditure will enable it to reach a balanced inventory level.
However, a higher mix of NAND, which has lower gross margin, falling memory prices and a slow decline in manufacturing cost, is likely to keep margins under pressure. Uncertainty hovering over trade and the economy is a concern as well.
Other noteworthy reports we are featuring today include The Walt Disney Company (DIS), Restaurant Brands International (QSR) and C.H. Robinson Worldwide (CHRW).
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