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Research Daily

Friday, April 3, 2020

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 Amazon (AMZN), Medtronic (MDT) and Vertex Pharmaceuticals (VRTX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Amazon’s shares have outperformed the S&P 500 over the past six months (+10.3% vs. -14.2%). The Zacks analyst believes that Amazon is benefiting from its aggressive retail strategies, distribution strength and robust Prime program.

Rapid adoption of Prime driven by customer benefits and strengthening grocery services is aiding its top line. Also, expanding content portfolio is encouraging Prime membership. Further, strengthening AWS services and its growing adoption rate are aiding Amazon’s dominance in the cloud space. Furthermore, improving Alexa skills and features remain major positives.

Also, rising number of Alexa compatible devices is a tailwind. However, rising transportation cost related to its free one-day shipping service remains an overhang and is likely to increase further. Further, foreign exchange headwinds are concerns. Additionally, rising cloud competition poses risk.

(You can read the full research report on Amazon here >>>)

Shares of Medtronic have lost -4% over the past year against the Zacks Medical Products industry’s fall of -15.8%. The Zacks analyst believes that within RTG, strong sales at Specialty and Brain Therapies more than offset slower growth in Pain Therapies.

Within CVG, despite the ongoing challenges, the company registered 1.8% growth at CER. The MITG arm recorded sturdy growth on strength across all businesses. The 2020 EPS guidance also looks promising.

However, its revenues lagging estimates, and escalating costs and expenses have been persistently pressurizing the margins. Unfavorable currency movement also deterred growth. The difficult macroeconomic conditions due to coronavirus outbreak is concerning as well.

(You can read the full research report on Medtronic here >>>)

Vertex’s shares have gained 8.1% over the past three months against the Zacks Biomedical and Genetics industry’s fall of -7.1%. The Zacks analyst expects Vertex’ sales in 2020 to be primarily driven by the uptake of Trikafta as well as higher international revenues due to additional ex-U.S. reimbursement arrangements in key countries like England and France.

Trikafta’s early approval and launch was a key milestone for Vertex. Trikafta is crucial for Vertex’s long-term growth as it has the potential to treat up to 90% of CF patients. Meanwhile, Vertex’s non-CF pipeline is progressing rapidly with data in multiple diseases expected in 2020. However, competitive pressure is rising in the CF market.

Also, Vertex’s dependence on just the CF franchise for growth is a concern. Estimates have declined ahead of Q1 earnings due to the coronavirus impact. Vertex has a positive record of earnings surprises in the recent quarters.

(You can read the full research report on Vertex here >>>)

Other noteworthy reports we are featuring today include Intuit (INTU), Bayer (BAYRY) and FirstEnergy (FE).

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Sheraz Mian

Director of Research

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>>>

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