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The Zacks Analyst Blog Highlights: Eli Lilly, Union Pacific, Lockheed Martin, Bayer and Prologis

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For Immediate Release

Chicago, IL – March 3, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Eli Lilly (LLY - Free Report) , Union Pacific (UNP - Free Report) , Lockheed Martin (LMT - Free Report) , Bayer (BAYRY - Free Report) and Prologis (PLD - Free Report) .

Here are highlights from Monday’s Analyst Blog:

Top Stock Reports for Eli Lilly, Union Pacific and Lockheed Martin

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 Eli Lilly, Union Pacific and Lockheed Martin. 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 >>>

Eli Lilly’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past six months (+10.7% vs. +1.4%). The Zacks analyst expects that in 2020, Lilly’s revenue growth will be driven by higher demand for newer drugs like Trulicity, Jardiance, Taltz, Verzenio, Basaglar, Emgality as well as newly launched Baqsimi and Reyvow.

Lilly’s presence across a wide range of therapeutic areas and a strong diabetes portfolio provide support in the face of generic competition. 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.

However, generic competition for several drugs including the expected generic entry of Forteo, rising pricing pressure in the United States and price cuts in some international markets are some top-line headwinds expected in 2020. 

Shares of Union Pacific have lost -4.5% over the past year against the Zacks Rail industry’s fall of -0.3%. The Zacks analyst is impressed with Union Pacific's initiatives to reward its shareholders. Since November 2017, the company has raised its quarterly dividend payout five times.

Initiatives to control costs in order to drive the bottom line are also impressive. The company’s operating ratio, which improved 210 basis points (bps) year over year to 60.6% in 2019, is mainly attributable to its cost-cutting efforts. Operating ratio is anticipated to improve further in the days to come.

However, sluggish overall volumes (down 6% in 2019) due to freight-related weakness represent a major headwind. Its escalated debt levels are concerning too. Also, the massive capex might be a spoilsport.

Lockheed Martin’s shares have lost -3.1% over the past three months against the Zacks Aerospace Defense industry’s fall of -13.3%. The Zacks analyst believes that expansionary budgetary provisions made by the current U.S. administration will immensely boost this defense prime's business.

Lockheed Martin, being the largest defense contractor in the world, enjoys strong demand for its high-end military equipment in domestic and international markets. It continues to be a strong cash generator, which helps it take important cash deployment decisions.

However, the company’s higher debt-to-equity ratio shows that the stock is highly leveraged when compared with its industry. Lockheed Martin also faces intense global competition for its broad portfolio of products and services. Furthermore, forced cost reduction initiatives for the F-35 program might hamper its operating results.

Other noteworthy reports we are featuring today include Bayer and Prologis.

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