Today's Must Read
Cancer Drugs to Drive AstraZeneca's (AZN) Sales in 2020
CME Group (CME) Banks on Futures Products, Expenses A Concern
Tuesday, May 12, 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.com (AMZN), AstraZeneca (AZN) and CME Group (CME). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amazon was a standout performer in the pre-Covid market and it has done even better during the pandemic, with the stock up +32.1% over the past year vs. +3.9% for the S&P 500. While we can reasonably expect these trends to continue going forward, the Zacks analyst points to some issues of concern like delivery delays and accelerating coronavirus-related expenses that might weigh on near-term profitability.
Strengthening AWS services contributed well to top-line growth in the March quarter. Moreover, AWS gained solid traction among healthcare workers, medical researchers, educational institutions and government organizations during the reported quarter owing to coronavirus management initiatives.
Further, Prime momentum owing to fast grocery services and strong content portfolio continued to benefit Amazon. Further, improving Alexa skills and expanding smart home product offerings were tailwinds.
Shares of AstraZeneca have gained +13.6% over the past six months against the Zacks Large Cap Pharmaceuticals industry’s rise of +6%. The Zacks analyst believes that AstraZeneca’s newer drugs, mainly cancer medicines Lynparza, Tagrisso and Imfinzi, should keep driving revenues in 2020. Its pipeline is strong with abundance of catalysts lined up for 2020.
AstraZeneca beat Q1 estimates for both earnings and sales. Its products like Nexium, Crestor and Seroquel are facing generic competition, which is hurting sales. The diabetes franchise also faces stiff competition while pricing pressure is hurting sales in the respiratory unit. Also, the coronavirus outbreak may hurt its profits in 2020.
However, AstraZeneca has engaged in external acquisitions and strategic collaborations to boost its pipeline while investing in geographic areas of high growth like China. Cost-cutting efforts should drive earnings.
CME Group’s shares have lost -12.9% over the past three months against the Zacks Securities and Exchanges industry’s fall of -1.7%. The Zacks analyst believes that CME Group remains well-poised for growth on strong market position driven by varied derivative product lines.
Efforts to expand and cross sell through strategic alliances, acquisitions, new product initiatives and a stable global presence bode well. Product innovation and growing proportion of volume from customers outside the United States have been aiding results. However, escalating expenses are likely to put pressure on margin expansion.
Its diversified product portfolio is significantly exposed to volatile interest rate, firm government regulations and limited credit availability in unstable capital and credit market. CME Group’s first-quarter earnings per share of $2.33 beat the Zacks Consensus Estimate by 4.5% and improved 43.8% year over year.
Other noteworthy reports we are featuring today include Cisco Systems (CSCO), Advanced Micro Devices (AMD) and General Electric (GE).
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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>>>