Today's Must Read
New COVID-19 Tests launch Aid Thermo Fisher (TMO) Amid Mayhem
LNG Focus, Wide Spread Asset Portfolio Aid TOTAL (TOT)
Wednesday, May 13, 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 SAP SE (SAP), Thermo Fisher Scientific (TMO) and TOTAL (TOT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
SAP’s shares have underperformed the Zacks Computer Software industry over the past year (-7.8% vs. +25.6%). The Zacks analyst believes that the company is benefiting from strong growth in cloud revenues and expanding customer base.
Robust adoption of S/4HANA, Fieldglass, Concur and SuccessFactors Employee Central solutions is a key catalyst. Moreover, synergies from its acquisition of Qualtrics bode well for the top line. Additionally, strong demand for cloud solutions in the Europe, Middle East and Africa (EMEA) region holds promise.
However, increasing investments to enhance cloud-based offerings are likely to hinder margins. Further, the coronavirus outbreak is weighing on software licenses & support revenues. Moreover, SAP trimmed 2020 guidance on account of uncertainty around coronavirus-induced impact on business.
Shares of Thermo Fisher have gained +12.5% over the past six months against the Zacks Medical Instruments industry’s fall of -1.4%. The Zacks analyst is encouraged by the strong year-over-year revenue growth in Life Sciences Solutions and Laboratory Products and Services segments.
The company’s end-market underlying growth performance was strong before the outbreak in China. Meanwhile, the company is optimistic about the progress related to its COVID-19 diagnostic test. In the first quarter, the company reported rapid uptake of these diagnostic kits.
However, the coronavirus outbreak has massively disrupted the global supply chain. Two of the end markets registered loss in the first quarter, largely due to customer shutdowns in China.
TOTAL’s shares have lost 31.2% over the past three months against the Zacks Integrated International Oil industry’s fall of 30.8%. The Zacks analyst believes that TOTAL continues to gain from startups, renewable projects, its LNG portfolio and the expanding upstream portfolio that has above industry-average exposure to faster-growing hydrocarbon producing regions.
Streamlining of the asset portfolio and its capability to generate cash flows are likely to strengthen operations. In the past six months, shares of TOTAL have outperformed the industry. However, the company’s profitability is likely to be adversely impacted if the weakness in commodity prices continues.
TOTAL has to compete with other global operators amid declining demand caused by the COVID-19 pandemic. TOTAL's operations in some politically-troubled regions and increasing competition might affect profitability.
Other noteworthy reports we are featuring today include Citigroup (C), 3M (MMM) and Fidelity National Information Services (FIS).
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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>>>