Top Stock Reports for Amazon.com, Sanofi & Target

Friday, November 11, 2022

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 Amazon.com, Inc. (AMZN), Sanofi (SNY) and Target Corporation (TGT). 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 Amazon.com have declined -45.2% over the past year against the Zacks Internet - Commerce industry’s decline of -48.6% and the -17.1% decline in the S&P 500 index.

Weighing on Amazon's near-term outlook is the view that the company's strong growth during Covid resulted from pulled forward revenues from future periods that need to be accounted for over the next few quarters. The company is also believed to have over-hired during the pandemic, as a result of which its cost base has signficantly increased.

These near-term headwinds aside, it is gaining on solid Prime momentum owing to ultrafast delivery services and strong content portfolio. Strengthening relationship with third-party sellers is another positive.

Also, growing momentum across Amazon Music is contributing well. Additionally, strong adoption rate of AWS is aiding the company’s cloud dominance. Expanding AWS services portfolio is continuously helping Amazon in gaining further momentum among the customers.

Further, robust Alexa skills and expanding smart home products portfolio are positives. Additionally, the company’s strong global presence and solid momentum among the small and medium businesses remain tailwinds. Considering the abovementioned facts, the Zacks analyst expect 2022 revenue to be up 11% from 2021.

(You can read the full research report on Amazon.com here >>>)

Sanofi’s shares have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-12.7% vs. +10.7%). The company is facing headwinds include weak performance of diabetes drugs and generic competition for many drugs. However, Sanofi’s Specialty Care unit is on a strong footing, particularly with the regular label expansion of Dupixent.

Dupixent has become the key top-line driver for Sanofi. With outside U.S. revenues accelerating and multiple approvals for new indications expected in the near future, its sales are expected to be higher. Sanofi possesses a leading vaccine portfolio, which has become the primary top-line driver. Its R&D pipeline is strong.

Several data read-outs are expected in 2022. Sanofi’s Consumer unit is delivering above market sales growth. Sanofi has also launched several new drugs in the past couple of years and is expanding its pipeline through M&A deals.

(You can read the full research report on Sanofi here >>>)

Target’s shares have declined -24.7% this year vs. Walmart's -1.5% drop and the S&P 500 index's -18.2% drop. The market has been unwilling to give Target credit for the inventory growth issue that came through in its April-quarter report in May. This is a relatively favorable set up for the stock should next week's quarterly report turns out to be better than what the market fears.

Target has been deploying resources to enhance omni-channel capabilities, come up with new brands, refurbish stores and expand same-day delivery options to provide customers seamless shopping experience.

Target has been making multiple changes to its business model to adapt and stay relevant in the dynamic retail landscape. These have been contributing to the top line. We believe that Target’s attempt to right-size inventory is the step in the right direction, as the demand skewed toward consumer staples and away from discretionary categories.

However, this hurt margins as was visible in the second quarter of fiscal 2022 but better position the company to gain market share. The Zacks analyst expect top line to increase 3% and 4.2% in the third- and fourth-quarter, respectively. For the back half of the year, we expect operating margin to improve sequentially.

(You can read the full research report on Target here >>>)

Other noteworthy reports we are featuring today include Humana Inc. (HUM), General Dynamics Corporation (GD), and The PNC Financial Services Group, Inc. (PNC).

Sheraz Mian
 
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>>>

Today's Must Read

Amazon (AMZN) Rides on Prime Strength & Growing AWS Adoption

Target's (TGT) Omnichannel & Store Expansion to Boost Sales

Sanofi (SNY) Relies on Dupixent and Vaccines to Drive Growth

Featured Reports

Order Flow Aids General Dynamics (GD) Amid Supply Challenges
Per the Zacks Analyst, solid order flow for its products bolsters General Dynamics' revenue growth prospects. Yet Russia-Ukraine conflict led supply chain challenges may hurt its growth

Inorganic Growth Aids PNC Financial (PNC), High Costs Ail
Per the Zacks analyst, PNC Financial's inorganic will diversify its revenue mix while strong loans and deposits aid growth. However, rising costs and exposure to a risky loan portfolio are concerning.

America Movil (AMX) Benefits from Increasing Subscriber Base
Per the Zacks analyst, America Movil's performance is gaining from increased broadband client base. However, stiff competition and the firm's high leverage remain concerns.

Expansion Efforts Aid O'Reilly (ORLY), Debt Plays Spoilsport
While O'Reilly's revenues are set to get a boost from store openings and distribution centers, the Zacks analyst is concerned of the high long-term debt to capitalization of 94%.

HVAC & Controls Aids Johnson Controls (JCI) Amid Cost Woes
The Zacks analyst is encouraged by growth in the Building Solutions North America unit due to growth in HVAC & Controls. However, commodity cost-inflation is concerning for the company.

Kimberly-Clark's (KMB) Cost-Cutting Aid Amid Rising Inflation
Per the Zacks analyst, Kimberly-Clark has been taking robust steps to lower costs amid inflationary pressure. The company generated savings of $80 million from the FORCE program in the third quarter.

Werner (WERN) Rides on Segmental Growth Amid Rising Expenses
Per the Zacks Analyst, strength across both segments Truckload Transportation Services and Logistics is aiding Werner's top-line growth. Rising operating expense are likely to weigh on the bottom line

New Upgrades

Humana (HUM) Rides on Solid Medicare Business, Balance Sheet
Per the Zacks analyst, Humana's Medicare Advantage business remains a driving factor for its top line. Also, its strong balance sheet enables business investments that drive long-term growth.

Marathon (MPC) Gains from Sale of Speedway Retail Unit
The Zacks analyst likes Marathon's sale of Speedway business, which provided a much-needed cash infusion and came with a supply agreement ensuring a steady revenue stream.n

Digital Transformation and Product Strength Aid Nutanix (NTNX)
Per the Zacks analyst, Nutanix is benefiting from higher investments by clients in digital transformation as well as frequent product refreshes, which help it to gain new customers.

New Downgrades

Moderna's (MRNA) Dependence on COVID Vaccine Revenues A Woe
Moderna has boosted its cash resources on the back of robust sales of its COVID vaccine. However the Zacks Analyst is concerned that lower cases of COVID infections fuel uncertainty for vaccine demand

Weak Asset Quality, High Costs Ails Credit Acceptance (CACC)
Per the Zacks analyst, rising expenses and tough operating backdrop are likely to hurt Credit Acceptance's bottom line. Worsening credit quality and high levels of debt are other key near-term woes.

Rising Mortgage Rates & Input Costs to Hurt D.R. Horton (DHI)
Per the Zacks analyst, rising mortgage rates, material cost inflation and continued supply-chain issues have been impacting D.R. Horton's orders and backlogs.

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Sanofi (SNY) : Free Stock Analysis Report
 
General Dynamics Corporation (GD) : Free Stock Analysis Report
 
The PNC Financial Services Group, Inc (PNC) : Free Stock Analysis Report
 
Target Corporation (TGT) : Free Stock Analysis Report
 
Humana Inc. (HUM) : Free Stock Analysis Report
 
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