Mark Vickery Published on |
Wednesday, January 10, 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 Johnson & Johnson (JNJ), Micron Technology, Inc. (c) and The Southern Company (SO). 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 Johnson & Johnson have gained +3.4% over the past six months against the Zacks Large Cap Pharmaceuticals industry’s gain of +17.3%. The company due to the separation of the Consumer Health unit, has now become a two-sector company focused on the Innovative Medicine and MedTech fields.
Growth in the Innovative Medicine unit is being driven by existing products like Darzalex, Tremfya, Erleada, Invega Sustenna and Uptravi, and also continued uptake of new launches, including Spravato, Carvykti and Tecvayli. The MedTech unit is showing improving trends, driven by a recovery in surgical procedures and contribution from new products.
J&J is making rapid progress with its pipeline and line extensions. However, headwinds like generic competition and pricing pressure persist. Though J&J has taken meaningful steps to resolve its talc and opioid litigation, uncertainty exists regarding the talc litigations.
(You can read the full research report on Johnson & Johnson here >>>)
Micron Technology’s shares were in line with the Zacks Semiconductor Memory industry over the past six months (+31.4% vs. +31.4%). The company’s better-than-expected first-quarter performance, along with sequential growth across all key metrics, reflects the benefits of an improving supply-demand environment and signals that the industrywide sluggish period is nearing its end, and the company is moving back to profitability.
The expectation of supply normalization by mid-year 2024 is likely to drive pricing, while the boom in artificial intelligence spending is expected to fuel demand for its chips used in the data center end market. A rising mix of high-value solutions and improving customer engagement and cost structure are growth drivers as well.
Additionally, 5G adoption in the IoT devices and wireless infrastructure is likely to spur demand for memory and storage. However, the United States and China’s tit-for-tat trade war is a major threat to the company.
(You can read the full research report on Micron Technology here >>>)
Southern Company’s shares have outperformed the Zacks Utility – Electric Power industry over the past six months (+3.7% vs. -4.7%). The company is leveraging the demographics of its operating territories, as in healthy population and job growth, the utility has gradually increased its customer base.
With good rate-base growth and constructive regulations, the power supplier is expected to generate steady earnings and dividend growth in the coming years. However, its elevated leverage, along with continued timing and cost overrun issues over its Vogtle project, are major overhangs.
While the electric utility holding company’s debt-to-capitalization of 62.6% restricts financial flexibility, its $25-billion Vogtle nuclear plant has already exceeded budget and is years behind schedule. Therefore, Southern Company warrants a cautious stance for investors.
(You can read the full research report on Southern Company here >>>)
Other noteworthy reports we are featuring today TotalEnergies SE (TTE), Motorola Solutions, Inc. (MSI) and PACCAR Inc. (PCAR).
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>>>
Per the Zacks analyst TotalEnergies’s presence in entire LNG value chain and expansion of clean energy generation through joint venture and acquisition will boost its performance.
Per the Zacks analyst, Motorola is likely to benefit from balanced organic growth and acquisitions, backed by strong demand across video security and services, land mobile radio and related software.
Per the Zacks analyst, PACCAR’s DAF lineup, comprising the XF, XG and XD models augurs well. High capex requirements to develop technologically advanced offerings remains a concern.
While Nucor faces headwinds from lower selling prices, it will benefit from efforts to boost production capacity and growth via acquisitions, per the Zacks Analyst.
Per the Zacks analyst, global footprint, higher interest rates and strong balance sheet are expected to keep supporting BNY Mellon amid higher expenses and rising funding costs.
Per the Zacks analyst, the high demand for SBA Communications’ wireless communication assets amid rising mobile data usage and 5G deployments bodes well. However, customer concentration is a key woe.
Per the Zacks analyst, V.F. Corp is on track with the Reinvent program, focused on brand-building and improving operating results. The program is expected to deliver $300 million in fixed cost savings
Per the Zacks analyst, Telefonica’s performance benefitted from strong revenue growth across Telefonica Brasil and Tech business segment. Also, increasing 5G coverage across Spain is a tailwind.
Per the Zacks analyst, PulteGroup is benefiting build-to-order approach and quick-move-in homes. Also, it raised investment in land development and the purchase of new land assets on rising demand.
Per the Zacks analyst, Reinsurance Group is set to gain from better pricing and expanding business in the pension risk transfer market. Solid in-force business ensures predictable long-term earnings.
Per the Zacks analyst, National Fuel Gas will fail to meet obligations if its units contribute lower than expected, competition from peers and other clean energy providers can impact operation.
The Zacks Analyst is worried about escalating operating expenses, primarily due to higher selling, general and administrative expenses, which pose a threat to the company’s bottom line
Per the Zacks analyst, Patterson Companies continues to face stiff competitive landscape along with supplier concentration. A diverse portfolio and strength in animal and dental markets raise optimism
