Today's Must Read
Trulicity, Taltz to Drive Lilly's (LLY) Sales in 2020
New COVID-19 Tests launch Aid Thermo Fisher (TMO) Amid Mayhem
Tuesday, June 16, 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 Procter & Gamble (PG), Eli Lilly (LLY) and Thermo Fisher Scientific (TMO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Procter & Gamble shares have outperformed the Zacks Soap and Cleaning Materials industry over the past year (+5.2% vs. -0.6%), with the momentum expected to continue on the back of successful efforts to make its cleaning and personal care products available during this crisis have helped bolster sales.
The company’s solid third-quarter fiscal 2020 earnings mark the continuation of its positive surprise trend. Further, earnings and sales improved year over year in the reported quarter on gains from significant sales increase, related fixed cost leverage and ongoing productivity efforts. Top line gained from organic sales growth, driven by rise in organic shipment volume and better pricing.
Total productivity cost savings aided core currency-neutral gross and operating margin by 130 bps and 240 bps, respectively. Further, it delivered adjusted free cash flow productivity of 113% in the fiscal third quarter. However, currency fluctuations remain concerning. Due to stronger headwind from foreign exchange rates, the company lowered its all-in sales view for fiscal 2020.
Shares of Eli Lilly have gained +12.9% over the past six months against the Zacks Large Cap Pharmaceuticals industry’s fall of -4.5%. This reflects Lilly’s strong presence across a wide range of therapeutic areas and boasts a strong diabetes portfolio. Lilly expects the economic consequences of the coronavirus pandemic to hurt its profits in 2020.
On the flip side, the Zacks analyst mentions that generic competition for several drugs, rising pricing pressure in the United States, and price cuts in some international markets like China, Japan and Europe will be some top-line headwinds in 2020.
Nonetheless, Lilly still expects revenue growth to be driven by higher demand for its growth drugs like Trulicity, Taltz, and others. Lilly is making significant pipeline progress with several positive late-stage data readouts scheduled for 2020. Lilly is also regularly adding promising new pipeline assets through business development deals.
Thermo Fisher’s shares have gained +15.1% over the past three months against the Zacks Medical Instruments industry’s rise of +22.9%. The Zacks analyst looks forward to Thermo Fisher’s agreement to acquire QIAGEN N.V. for $11.5 billion.
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. Thermo Fisher ended the first quarter with better-than-expected numbers.
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.
Other noteworthy reports we are featuring today include Costco Wholesale (COST), Anheuser-Busch InBev (BUD) and Shopify (SHOP).
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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>>>