Today's Must Read
Amgen (AMGN) Boasts a Strong Branded/Biosimilars Pipeline
Sturdy Comps Run to Augment TJX Companies' (TJX) Top Line
Friday, October 11, 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, includingToyota Motor (TM), Amgen (AMGN) and The TJX Companies (TJX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Toyota’s shares have outperformed the Zacks Foreign Automotive industry year to date (14.3% vs. 3%). The Zacks analyst believes that developing self-driving, electric and fuel-cell vehicles will strengthen Toyota’s product competitiveness in the medium to long term.
Beside manufacturing vehicles, it is also collaborating to build products. It expanded its ties with Subaru Corporation to develop electric vehicles and driverless cars. Changing product mix in North America, Europe and Asia is driving Toyota’s sales. Moreover, the company is shifting vehicle production to new platforms to cut costs by 20%.
However, declining vehicle demand in North America and frequent vehicle recalls are concerning Toyota. Amplified labor costs, majorly in Japan, Asia and North America, along with increased raw material costs across regions are adding to the company’s expenses. Thus, investors are recommended to wait for a better entry point.
Shares of Amgen have gained 3.8% in the past six months against the Zacks Biomedical and Genetics industry’s decline of 14.3%. The Zacks analyst believes that while Amgen’s newer drugs — Prolia, Xgeva, Blincyto, Kyprolis — will drive sales, biosimilar and brand competition for its legacy products will create pressure on sales in the second half.
Meanwhile, uptake of key drug, Repatha has been slow due to payer restrictions. However, Amgen is progressing with its pipeline. In the past five years, Amgen has launched nine products, including two in new therapeutic areas. Amgen boasts a strong biosimilars pipeline, which could be an important long-term growth driver for the company.
Amgen’s restructuring plan is making it leaner and more cost efficient. Amgen’s shares have outperformed the industry this year so far. Estimates have gone up ahead of the company’s Q3 earnings release. Amgen has a positive record of earnings surprises in recent quarters.
TJX’s shares have gained 1.4% over the past three months compared with the Zacks Discount Stores industry’s rise of 8.2%. The Zacks analyst expects the company to deliver above-average performance in the near term on the back of its robust comps trend.
Markedly, continuous rise in consumer traffic and strong merchandising policies are fueling comps. These along with TJX Companies’ off-price model, strategic store locations and impressive brands have been driving store and online performance. This was reflected in the company’s second-quarter fiscal 2020 results, wherein customer traffic rose for the 20th straight time.
Apart from these, we commend TJX Companies’ shareholder-friendly moves. However, the company has been witnessing high supply-chain costs, which have been weighing on gross margin. Margins also remain susceptible to any rise in wage costs. Additionally, volatile currency movements are a threat.
Other noteworthy reports we are featuring today include Morgan Stanley (MS), Norfolk Southern (NSC) and BCE (BCE).
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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>>>