Tuesday, August 13, 2019
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features updated research reports on 16 major stocks, including Micron Technology (MU), Sinopec (SNP) and Celgene (CELG). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.
Micron’s shares have outperformed the Zacks Semiconductors industry (+32.8% vs. +14%) in the year-to-date period. The Zacks analyst thinks Micron is well poised to benefit from resurgence in memory demand, backed by a progress in customer inventory adjustments in the cloud, graphics and PC markets.
Moreover, its focus on increasing the mix of high-value solutions in its portfolio is a boon. Strong growth in managed NAND products is also a tailwind. Further, introduction of server processors that support higher memory densities is likely to fuel demand for its solutions. Additionally, the company’s decision to cut down on capital expenditure will enable it to reach a balanced inventory level.
However, it is hit by declining memory prices (both DRAM and NAND) and lower demand from smartphone OEMs. Moreover, the U.S.-China trade spat has made the demand environment highly volatile for Micron.
Shares of Sinopec have underperformed the Zacks Integrated Oil industry over the past six months, losing -29.6% vs -17.4%. The Zacks analyst believes Sinopec’s latest major discoveries will boost its production in the days to come.
Sinopec’s natural gas business has immense potential for growth over the coming years, as China intends to move from coal to natural gas. Its natural gas capacity building in Hangjinqi can enable the company to significantly gain from rising demand for cleaner energy source. Notably, it is committed to increase shareholders’ wealth. However, China’s slowest economic growth in decades is expected to affect its refining businesses.
Moreover, the company's Chemical unit is currently under pressure from declining demand. Also, global economic slowdown and the trade conflict between the United States and China will affect commodity prices. This can hurt Sinopec’s Exploration and Production profits.
Celgene’s shares have gained +3.8% in the past three months versus the Zacks Biomedical and Genetics industry's loss of -11.1% over the same period. The Zacks analyst believes that the company’s lead drug, Revlimid, continues to drive revenues on label expansions and market share gains.
Celgene’s second-quarter results were strong as it comfortably beat on both sales and earnings. Investors’ focus is on the merger announcement with large-cap pharma Bristol-Myers Squibb Co. for a whopping $ 74 billion.
Per the terms, Celgene shareholders will receive $ 50 plus one share of Bristol-Myers and one tradeable Contingent Value Right, which will entitle the holder to receive a cash payment of $ 9.00 upon the achievement of FDA approval for three candidates (ozanimod, liso-cel and bb2121). Shares have outperformed the industry in the year so far. However, pipeline setbacks are a concern.
Other noteworthy reports we featured today include Paychex (PAYX), LyondellBasell Industries (LYB) and McCormick & Company (MKC).
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Today’s Must Read
Per Zacks analyst Atmos Energy’s $ 9-$ 10B investment in next five years, customer additions and 99% of its capital outlay earning returns within 12 months boosts its performance.
Per the Zacks Analyst, AES Corp.’s focus on renewables should boost growth led by rapid expansion of renewable overseas footprint. However, stringent environmental regulations are a major headwind.
Per the Zacks Analyst, CenterPoint Energy makes notable investment to upgrade infrastructure and improve reliability.
The Zacks Analyst believes that acquisition of Oasis Outsourcing will bolster Paychex’s PEO growth strategy, expand its PEO sales organization and boost client base.
Per the Zacks analyst, LyondellBasell should gain from synergies of A. Schulman buyout amid raw material cost pressure.
Per the Zacks analyst, McCormick’s bottom line is steadily gaining from cost savings from the Continuous Improvement (CCI) program. The plan is likely to aid savings worth $ 110 million in fiscal 2019.
Per the Zacks analyst, Twilio’s firm focus on introducing products is helping it increase its active customer accounts, which is further driving the top line. Moreover, SendGrid buyout is a tailwind.
Per the Zacks analyst, Intrexon focuses on the buyout of certain product-focused companies that may leverage its suite of proprietary technologies and also aims at strengthening its pipeline.
Per the Zacks Analyst, solid growth in Real Estate Services segment fueled Jones Lang LaSalle’s organic growth. Strategic buyouts and technology investments provides it a competitive edge.
Per the Zacks analyst, Alleghany is poised to grow on strong underwriting performances by TransRe and RSUI, CapSpecialty and PacificComp, better pricing, strategic buyouts and solid global footprint.
The Zacks analyst is worried about QIAGEN’s dull performance in the Americas on soft QuantiFERON-TB sales. Also, unfavorable foreign exchange remains a concern for the company.
Per the Zacks analyst, suspension of shipments to Huawei and sluggish global auto production are hurting Maxim’s performance in automotive, and communications and data center markets.
The Zacks analyst believes that A. O. Smith is struggling with softer sales of water heaters, water treatment products and air purifiers in China. Also, high operating costs remains a concern.
China Petroleum & Chemical Corporation (SNP): Free Stock Analysis Report
Paychex, Inc. (PAYX): Free Stock Analysis Report
Micron Technology, Inc. (MU): Free Stock Analysis Report
McCormick & Company, Incorporated (MKC): Free Stock Analysis Report
LyondellBasell Industries N.V. (LYB): Free Stock Analysis Report
Celgene Corporation (CELG): Free Stock Analysis Report
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