Tuesday, April 7, 2020
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 Procter & Gamble (PG), AbbVie (ABBV) and QUALCOMM (QCOM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Procter & Gamble’s shares have outperformed the Zacks Soap and Cleaning Materials industry over the past six months (-2.6% vs. -5.8%). The Zacks analyst believes that currency fluctuations remain concerning. Nevertheless, gains from acquisitions and divestitures are likely to partly offset the currency headwinds.
The company’s solid second-quarter fiscal 2020 earnings mark the continuation of its positive surprise trend. Further, earnings and sales improved year over year in the reported quarter on gains from productivity efforts, robust volume, favorable mix and pricing. Total productivity cost savings aided core currency-neutral gross and operating margin by 120 bps and 220 bps, respectively.
Further, it delivered adjusted free cash flow productivity of 100%. Backed by strong organic sales growth, core earnings and returns to shareholders in the fiscal second quarter, the company raised its view for fiscal 2020.
Shares of AbbVie have lost -9.8% over the past year against the Zacks Large Cap Pharmaceuticals industry’s fall of -1.3%. The Zacks analyst believes that AbbVie’s Humira is performing well, driven by strong demand trends amid new competition. It has been successful in expanding approvals for its cancer drugs, Imbruvica and Venclexta.
The company also has an impressive late-stage pipeline. Its two new drugs, Skyrizi and Rinvoq, were off to a strong start and have with significant potential. The acquisition of Allergan, if successful, should diversify AbbVie’s revenue base and accelerate its non-Humira business.
Sales erosion due to direct biosimilar competition to Humira in international markets is a big headwind. Also, the decline in HCV sales and uncertainty about the coronavirus impact is a concern. Estimates are stable ahead of Q1 earnings. AbbVie has a positive record of earnings surprise in the recent quarters.
QUALCOMM’s shares have lost -20% over the past three months against the Zacks Wireless Equipment industry’s fall of -%. The Zacks analyst believes that the company is likely to help users experience seamless transition to super-fast 5G networks, delivering low-power resilient multi-gigabit connectivity with best-in-class security.
Qualcomm is focused on retaining its position in the chipset market and mobile connectivity with several technological achievements and innovative product launches. It offers the flexibility and scalability needed for broad and fast 5G adoption through commercialization by OEMs.
While the company has expanded its leadership to the high tiers with Snapdragon 700, Snapdragon 800 solutions should continue defining the premium tier benchmarks. However, Qualcomm is likely to face softness in demand from China with Huawei gaining prominence in the local market and coronavirus impacting sales.
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