Monday, August 20, 2018
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 IBM (IBM), Texas Instruments (TXN) and Glaxo (GSK). 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 >>>
IBM’s shares have underperformed the broader market on a year-to-date basis, losing -4.8% vs. the S&P 500’s +6.8% gain. IBM provides advanced information technology solutions, including computer systems, software, storage systems and microelectronics.
The company benefits from strong demand for z14 Mainframe and Power products. Moreover, IBM’s improving position in the cloud, security and analytics bodes well. Also, accretive acquisitions have expanded IBM’s product portfolio into higher-growth segments, such as cloud computing, AI and Big Data.
However, the Zacks analyst thinks the strategic imperatives will take some more time to report meaningful growth and offset weakness in the traditional business. IBM’s ongoing heavily time-consuming business model transition to cloud continues to hurt the stock.
(You can read the full research report on IBM here >>>).
Shares of Buy-ranked Texas Instruments have gained +37.2% in the past year, underperforming the Zacks General Semiconductor industry which has gained +40.1% over the same period. Texas Instruments reported robust second-quarter results on the back of strength in auto and industrial markets.
The company continues to prudently invest its R&D dollars in several high margin, high-growth areas of the analog and embedded processing markets. The Zacks analyst thinks this is gradually increasing its exposure to industrial and automotive markets and dollar content at customers, while reducing exposure to volatile consumer/computing markets.
Margins continue to expand on secular strength in the auto and industrial markets and manufacturing efficiencies that include growing 300-millimeter Analog output. Continuous dividend hike is a big positive. However, increasing competition, unfavorable currency effect and a high debt load remain concerns.
(You can read the full research report on Texas Instruments here >>>).
Glaxo’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry year to date, gaining +16.3% versus the industry’s +4.8% increase. Glaxo beat estimates for earnings and sales in Q2 and raised its earnings growth expectations for the year. The Zacks analyst thinks the performance of Glaxo’s new products has been encouraging.
Meanwhile, a strong start to its three newest products — Trelegy Ellipta, Shingrix and Juluca — and buy in of Novartis’ stake in the Consumer Healthcare JV have strengthened Glaxo’s competitive position. However, persistent challenges like stiff competition, genericization and pricing pressure are hurting sales. Particularly, pricing pressure and competitive dynamics are hurting sales of Glaxo’s inhaled respiratory products, particularly the older ones.
Its top-selling product, Advair, is also expected to face generic competition in the United States this year, which will further hurt sales. The slowdown in sales of the Consumer Healthcare segment is also a concern.
(You can read the full research report on Glaxo here >>>).
Other noteworthy reports we are featuring today include Simon Property Group (SPG), BB&T Corp (BBT) and State Street (STT).
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Mark Vickery
Senior Editor
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>>>
Adoption of Cloud, Security & Analytics Solutions Aids IBM
Texas Instruments (TXN) Benefits From Strong Auto Growth
Solid Start for New Drugs Boosts Glaxo (GSK), Advair Faces Generics
Simon Property (SPG) to Gain From Portfolio Revamp Efforts
Per the Zacks analyst, Simon Property is expected to benefit from new development, redevelopment, expansion and acquisition efforts. However, the online sales boom will likely impede top-line growth.
Acquisitions Aid State Street (STT), High Expenses A Woe
Per the Zacks analyst, State Street has been growing through acquisitions and focus on its new business wins. However, escalating costs and uncertain capital markets remain a headwind.
BB&T (BBT) Well Poised with Increasing Rates and Loan Growth
Per the Zacks analyst, BB&T remains well positioned for top-line improvement given the continued growth in loan balances.
High Industrial Real Estate Demand to Drive Prologis (PLD)
Per the Zacks analyst, Prologis is well poised to benefit from high demand for industrial real estate space. However, intensifying trade tensions and rising supply remain concerns.
Sprint (S) Rides on Solid Wireless Demand, High Leverage Ails
Per the Zacks analyst, solid wireless services demand with network modernization efforts for postpaid & prepaid subscribers drive Sprint's cash flow.
Ford (F) Shifts to Low Gear on Asia Pacific and Europe Woes
Per the Zacks analyst, challenges faced by Ford in China are putting strain on its revenues.
New Drugs Boost Roche (RHHBY), As Legacy Drugs Face Generics
Per the Zacks analyst, strong sales of Ocrevus, Perjeta, Tecentriq and Alecensa maintain momentum for Roche.
Product Launches, Light Vehicles Demand to Aid Autoliv (ALV)
Per the Zacks analyst, improving demand for light vehicles in all the markets, along with frequent launch of innovative products will bolster Autoliv's organic sales growth.
Strengthening End-Markets, Acquired Assets to Aid IDEX (IEX)
Per a Zacks analyst, IDEX is poised to gain from growing business in end markets, including water, energy and more, served. Synergistic gains from acquired assets are proving beneficial.
Rising Loans & Interest Rates Aid BOK Financial (BOKF)
Per the Zacks analyst, BOK Financial's organic strength is reflected by rising loans and deposits balances. Easing margin pressure on rising interest rates is likely to support top line growth.
Xerox (XRX) Hurt by Lower Demand for Paper Related Products
The Zacks analyst believes that decreasing demand for paper-related systems and products due to technological advancements will hurt Xerox.
Low BMW & Honda Dealers' Margin Hits Sonic Automotive (SAH)
Per the Zacks analyst, low margin in certain models at BMW and Honda dealerships is hurting Sonic Automotive's profitability. This margin pressure is likely to continue going forward.
Jack Daniel's Price Hike Hurts Brown-Forman (BF.B) Revenues
Per the Zacks analyst, Brown-Forman plans to raise Jack Daniel's price in Europe due to the 25% tariff imposed on U.S. imports, which may hurt the brand's demand and the company's overall revenues.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
State Street Corporation (STT) : Free Stock Analysis Report
Simon Property Group, Inc. (SPG) : Free Stock Analysis Report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
GlaxoSmithKline plc (GSK) : Free Stock Analysis Report
BB&T Corporation (BBT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
