Top Analyst Reports for Merck, Salesforce & Philip Morris
Friday, January 5, 2024
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 Merck & Co., Inc. (MRK), Salesforce, Inc. (CRM) and Philip Morris International Inc. (PM). 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 >>>
Shares of Merck have gained +4.7% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +13.0%. The company’s products like Keytruda and Gardasil have been driving sales. With continued label expansion into new indications, particularly earlier-stage launches, Keytruda is expected to remain a key top-line driver.
Animal health and vaccine products are core growth drivers. Merck boasts a strong cancer pipeline, including Keytruda, which should drive long-term growth. Merck is investing in M&A activity to strengthen its pipeline.
However, generic competition for several drugs and rising competitive pressure, mainly on the diabetes franchise, will continue to be overhangs on the top line. There are concerns about Merck’s ability to grow its non-oncology business ahead of Keytruda’s loss of exclusivity later in the decade.
(You can read the full research report on Merk here >>>)
Shares of Salesforce have outperformed the Zacks Computer - Software industry over the past year (+78.8% vs. +57.3%). The company is benefiting from a robust demand environment as customers are undergoing a major digital transformation. The company’s sustained focus on aligning products with customer needs is driving the top line.
Continued deal wins in the international market are another growth driver. The buyout of Slack has positioned the company as a leader in enterprise team collaboration and improved its competitive standing versus Microsoft Teams. Salesforce’s strategy of continuously expanding generative AI offerings will help the company tap the growing opportunities in the space.
However, stiff competition and unfavorable currency fluctuations are concerns. Also, the challenging macroeconomic environment could hurt its growth prospects.
(You can read the full research report on Salesforce here >>>)
Shares of Philip Morris have outperformed the Zacks Tobacco industry over the past six months (+0.9% vs. -1.5%). The company has been gaining from its pricing power. Higher pricing variance was an upside to the company’s performance in the third quarter of 2023 and is likely to remain a driver.
A focus on reduced-risk products, especially IQOS, has been working well for Philip Morris, which is well-placed to become a majority smoke-free company by 2025. Strength in ZYN is also expected to drive performance in 2023. Management expects net revenues to increase by nearly 8% on an organic basis in 2023.
Philip Morris expects to make additional growth-oriented investments in 2023, including the commercialization of ILUMA. However, this may impact margins. Apart from this, soft cigarette shipment volumes have been a concern. In 2023, cigarette shipment volumes are expected to decline by 1-2%.
(You can read the full research report on Phillip Morris here >>>)
Other noteworthy reports we are featuring today include Novartis AG (NVS), CVS Health Corp. (CVS) and CME Group Inc. (CME).
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>>>
Today's Must Read
Keytruda to Remain Merck's (MRK) Key Top-Line Driver
Digital Transformation and Acquisitions Aid Salesforce (CRM)
Philip Morris' (PM) Pricing Aids Amid Low Cigarette Volumes
Featured Reports
Entresto, New Drugs Fuel Novartis (NVS) Amid Competition
Per the Zacks analyst, drugs like Entresto, Kesimpta, Zolgensma, Kisqali and Leqvio continue to fuel Novartis' growth. However, generic competition and pipeline setbacks remain concerns.
Health Services Growth Aids CVS Health (CVS), Cost Woes Stay
The Zacks analyst is impressed with CVS Health's health services arm gaining from pharmacy drug mix, specialty pharmacy growth and the addition of Signify and Oak Street. Yet, cost woe poses worry.
CME Group (CME) Futures Expansion Aids, Higher Expenses Hurt
Per the Zacks analyst, CME Group is well poised for growth with the expansion of futures products in emerging markets and OTC offerings. However, rising costs hurt its margins.
Enterprise (EPD) Gains on Long-term Contracts With Shippers
Enterprise is well positioned to generate steady cashflow from long-term pipeline contracts with shippers. Yet, its significant debt exposure concerns the Zacks analyst.
AXON Benefits from Strength in TASER Segment, High Costs Ail
Per the Zacks analyst, AXON's TASER Segment is driven by strong demand for TASER devices and higher cartridge revenue. However, high operating costs remain a concern for the company.
Permian Basin Presence, JV Aid Plains All American (PAA)
Per the Zacks analyst, Plains All American benefits from rise in production from the Permian region with a revival in demand for midstream services. Its joint ventures is expected to drive earnings.
Gol Linhas (GOL) Rides on Air Travel Demand, High Debt Ail
The Zacks Analyst is impressed with the fact that increased air-travel demand is aiding Gol Linhas' top-line performance. However, high debt remains a concern for the bottom line.
New Upgrades
Higher Transaction Fees, Acquisitions Aid Cboe Global (CBOE)
Per the Zacks analyst, Cboe Global is set to grow on higher transaction fees driven by trading volume growth given solid proprietary products. Also, buyouts have diversified its product portfolio.
Solid Contract Wins & Strategic Initiatives Aid Fluor (FLR)
Per the Zacks analyst, Fluor is benefiting from consistent contract wins, attributing to its backlog growth, and focus on business diversity. Also, the execution of its refined strategy bode well.
U.S. Cellular (USM) Rides on Growth in Fixed Wireless Portfolio
Per the Zacks analyst, solid demand trends in the fixed wireless portfolio, and increasing tower rental revenues will likely boost U.S Cellular's top line. Cost optimization initiative is a tailwind.
New Downgrades
Weakness in Communication Market Ails Analog Devices (ADI)
Per the Zacks analyst, Analog Devices is suffering sluggishness in communication end market due to ongoing inventory corrections.
High Cost, Weak Asset Quality Ail New York Community (NYCB)
Per the Zacks analyst, New York Community's rising costs will likely hinder its bottom-line growth. Deteriorating asset quality and geographic concentration in the Metro New York region are other woes
Stiff Competition, Forex Volatility Impairs Masimo (MASI)
The Zacks analyst is worried about Masimo's operation in an intensely competitive medical device industry. Volatility in currency movements is an added woe.
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Novartis AG (NVS) : Free Stock Analysis Report
CME Group Inc. (CME) : Free Stock Analysis Report
Salesforce Inc. (CRM) : Free Stock Analysis Report
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
Philip Morris International Inc. (PM) : Free Stock Analysis Report
CVS Health Corporation (CVS) : Free Stock Analysis Report
