Tuesday, November 3, 2020
Zacks Research Daily features the best research results from our team of analysts. Today’s Research Daily features new research reports on 16 major stocks, including Alphabet (GOOGL), Johnson & Johnson (JNJ) and Union Pacific (UNP). These research reports were hand-picked from over 70 reports published by our team of analysts today.
You can see all Today’s research reports here >>>
Alphabet Stocks outperformed Zacks’ internet services industry slightly over the cumulative period of the year (+ 23.7% vs. + 22.2%), with most of the gains coming after the impressive results from the research in the third trimester. Zacks analyst believes Google’s dominant market share in search is positive. The focus on innovation, strategic acquisitions and Android OS is expected to continue to generate strong cash flow.
Alphabet reported strong third quarter results. Search, cloud and YouTube activity remained strong during the quarter. The strengthening of the company’s cloud unit contributed to substantial revenue growth. In addition, the expansion of data centers will continue to strengthen its presence in the cloud space. Also, major updates in the search segment improve search results, which is a big plus.
Additionally, Google’s robust mobile search is gaining momentum. In addition, a strong focus on innovation in AI techniques and the home automation space should promote long-term business growth. However, the company’s growing litigation issues and increasing expenses could hurt profitability.
(You can read the full research report on Alphabet here >>>)
Actions of Johnson & johnson have gained + 7.4% over the past year against the + 0.4% increase in the Zacks Large Cap Pharmaceuticals industry. The Zacks analyst believes the Pharma unit is operating at above-market levels, supported by the successful expansion of the labels of blockbuster drugs, Imbruvica, Darzalex and Stelara. J&J is also making rapid progress with its pipeline and line extensions.
J&J beat sales and profit estimates in the third quarter. It raised its outlook for 2020 due to a faster-than-expected recovery in the medical devices unit, with trends expected to improve further in Q4 and 2021.
Several critical data readings are expected in the near term. However, headwinds like generic competition and pricing pressure persist. J&J faces numerous lawsuits, which allege personal injuries to patients caused by the use of its products. These lawsuits have created uncertainties.
(You can read the full Johnson & Johnson research report here >>>)
Pacific Union Stocks have gained + 19.6% in the past six months against the Zacks Rail industry’s rise of + 25.1%. The Zacks analyst applauds the company’s efforts to promote safety and improve productivity.
Union Pacific suffers from a dismal freight revenue scenario (down 13% in the first nine months of 2020). Freight revenues are affected, mainly by depressed volumes due to coronaviruses (down 10%). The weakness of Bulk, Premium and Industrial units weighed on the overall volume picture. The deterioration of the debt / EBITDA ratio is an additional problem. However, cost containment efforts, through the precision-timed railway model, are positive, especially in the wake of revenue concerns.
Due primarily to cost reduction efforts, the operating ratio is expected to improve in 2020. The company’s ability to generate free cash flow (up 5.8% in the first nine months of 2020 ) is also a godsend. An increase in the company’s parcel business due to strong e-commerce demand is an added bonus. The measures aimed at rewarding its shareholders are also encouraging.
(You can read the full Union Pacific research report here >>>)
Other interesting stories we feature today include Eli Lilly (THERE IS), Charter Communications (CHTR) and Anheuser-Busch InBev (BUD).
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Note: Sheraz Mian heads the Zacks Equity Research department and is a recognized expert in Global Profits. He is frequently cited in the print and electronic press and publishes the weekly Income trends and Income overview reports. If you would like to receive an email notification every time Sheraz publishes a new article, please click here >>>