Today's Must Read
Expanding User Base, Instagram Strength Aids Facebook (FB)
AbbVie (ABBV) Ex-U.S. Humira Sales Erode, New Drugs Impress
Monday, March 9, 2020
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 Apple (AAPL), Facebook (FB) and AbbVie (ABBV). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Apple’s shares have outperformed the S&P 500 over the past six months (+33.2% vs. +1.6%). The Zacks analyst believes that the company is benefiting from continued momentum in the Services segment, driven by strong App Store sales and the robust adoption of Apple Music and Apple Pay.
Non-iPhone devices, particularly Apple Watch and AirPod, are expected to drive the top line. Solid uptake of Apple Watch Series 5 is now helping the iPhone maker strengthen its presence in the personal health monitoring space. However, the company doesn’t expect to achieve its second-quarter revenue guidance due to the COVID-19 outbreak, which is expected to hurt iPhone supply and demand in China.
This in turn will likely dent investor confidence in the near term. Moreover, the company’s intensifying legal woes due to antitrust investigations and App Store-related lawsuits raise a concern.
Shares of Facebook have gained +6.9% over the past year against the S&P 500’s rise of +8.7%. The Zacks analyst believes that Facebook is benefiting from growth in Instagram Stories and Feed, and expanding user base in Asia Pacific.
The company’s initiatives to improve privacy, transparency and authenticity of ads are likely to boost user trust and engagement. The launch of Facebook View app, Facebook Pay, a simpler and faster Messenger for iOS app and more location control feature for Android users is positive.
However, Facebook expects top-line growth to slow down due to increasing limitations in tracking user activity amid the growing privacy-related regulations and changes made in mobile operating systems and browser platforms by Apple and Google as well as in its own tools like the Off Facebook Activity controls. Moreover, a persistent mix shift toward Stories is anticipated to hurt ARPU.
AbbVie’s shares have gained +2.3% over the past three months against the Zacks Large-Cap Pharmaceuticals industry’s fall of -0.4%. The Zacks analyst believes that AbbVie’s Humira is performing well driven by strong demand trends amid new competition.
Imbruvica has multibillion-dollar potential. AbbVie has been successful in expanding approvals for its cancer drugs, Imbruvica and Venclexta. It also has an impressive late-stage pipeline. It gained approvals for two new drugs with significant potential, Skyrizi and Rinvoq in 2019. Both are off to a strong start.
The acquisition of Allergan, if successful, should diversify AbbVie’s revenue base and accelerate its non-Humira business. AbbVie’s shares have outperformed the industry in the past one year. However, sales erosion due to direct biosimilar competition to Humira in international markets is a big headwind. Also, the decline in HCV sales is a concern.
Other noteworthy reports we are featuring today include Illumina (ILMN), TD Ameritrade (AMTD) and Freeport-McMoRan (FCX).
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.
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>>>