Tuesday, May 9, 2023
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 Eli Lilly and Company (LLY), Verizon Communications Inc. (VZ) and United Parcel Service, Inc. (UPS). 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 >>>
Eli Lilly shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+53.4% vs. +17.4%) reflecting the company solid portfolio of core drugs in diabetes, autoimmune diseases and cancer. Its revenue growth is being driven by higher demand for drugs like Trulicity, Taltz and others.
Eli Lilly is regularly adding promising new pipeline assets through business development deals. Lilly expects to launch four new medicines by 2023 end with Mounjaro for type II diabetes and cancer drug Jaypirca already launched. Mounjaro sales are already benefiting from strong demand trends.
However, the CRL for donanemab will probably delay the potential launch of the candidate. Generic competition for several drugs, rising pricing pressure in the United States and some international markets are some top-line headwinds.
(You can read the full research report on Eli Lilly here >>>)
Shares of Verizon Communications have outperformed the Zacks Wireless National industry over the past six months (+1.4% vs. -4.1%). The company is witnessing significant 5G adoption and fixed wireless broadband momentum. It plans to accelerate the availability of the 5G Ultra Wideband network with C-Band deployment, focusing on 5G mobility, nationwide broadband and mobile edge compute.
Customer-focused planning, disciplined engineering and continued network upgrades will likely augment its market position. However, its wireline division is struggling with persistent losses in access lines owing to stiff competitive pressures.
It has reiterated its earlier soft guidance for 2023 due to a challenging macroeconomic environment. Hefty expenses on promotions and lucrative discounts to attract customers are likely to hurt its profitability.
(You can read the full research report on Verizon Communications here >>>)
Shares of United Parcel Service have gained +2.1% over the past six months against the Zacks Transportation - Air Freight and Cargo industry’s gain of +10.4%. The company is looking to drive growth in this uncertain scenario by improving efficiencies. Efforts to reward its shareholders through dividends and buybacks bode well for UPS. The company's strong free cash flow generating ability pleases us and supports its shareholder-friendly activities.
UPS anticipates making dividend payments of $5.4 billion apart from buying back shares worth $3 billion in 2023. However, United Parcel Service now expects revenues in 2023 to be around $97 billion. The new forecast is at the low end of the previous outlook and much lower than 2022's actual figure. According to the Zacks analyst estimate, it is currently pegged at $96.98 billion.
The gloomy forecast is mainly due to weak consumer sales. Notably, average daily volume declined 5.4% in first-quarter 2023 at the U.S. Domestic package segment. The same declined 6.2% at the International Package division.
(You can read the full research report on United Parcel Service here >>>)
Other noteworthy reports we are featuring today include Novartis AG (NVS), Advanced Micro Devices, Inc. (AMD) and The Cigna Group (CI).
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
Lilly (LLY) Potential New Products Key to Growth
Verizon (VZ) Rides on 5G, Fixed Wireless Broadband Momentum
UPS Rides on Dividends & Buybacks Amid Shipping Volume Woes
Entresto, Kisqali Fuels Novartis (NVS) Amid Competition
Per the Zacks analyst, drugs like Entresto, Kesimpta, Zolgensma, Kisqali and Leqvio should continue to fuel growth amid generic competition for older drugs and pipeline setbacks.
Robust Product Portfolio & Partnerships Aid AMD's Prospects
Per the Zacks analyst, Advanced Micro Devices is benefiting from strong adoption of EPYC, Ryzen and Radeon processors. Moreover, alliances with Baidu, Amazon and Microsoft, bode well.
Cigna (CI) Benefits from Growing Revenues, Strong Cash Flows
Per the Zacks analyst, Cigna gains from solid performances of Evernorth Health Services and Cigna Healthcare businesses. However, rising costs are a concern.
Investments & Expanding Customer Base Aid Xcel Energy (XEL)
Per the Zacks analyst, Xcel's investment of $29.5 billion in the next five years to fortify infrastructure, while rising electric and natural gas customer base will boost demand and profitability.
Cenovus (CVE) Gains From Retail Fuel Division Divestment
Per the Zacks analyst, Cenovus optimizes its portfolio by divesting its retail fuel business, which will help reduce the debt burden. Yet, its rising costs for purchased products are concerning.
Pent Up Demand Aids Royal Caribbean (RCL), High-Costs Hurt
Per the Zacks analyst, strong close-in bookings at higher prices and continued strength of onboard spendings aid Royal Caribbean. However, inflationary pressures and supply chain risks hurt growth.
Facility Expansions Aid Catalent (CTLT) Amid Stiff Competition
The Zacks analyst is upbeat about Catalent actively expanding its facilities over the past few months to boost its business despite its operation in a highly competitive market.
Parker-Hannifin (PH) Backed by Meggitt Buyout, Win Strategy
The Zacks analyst is encouraged by the company's growth on the back of synergies from the Meggitt Buyout, and enhanced margin performance, thanks to benefits from the Win strategy.
Post Holdings (POST) Gains From Solid Foodservice Business
Per the Zacks analyst, Post Holdings' Foodservice business has been gaining strength. In the fiscal second quarter, Foodservice sale increased 40.1% to $633.2 million, pricing being one of the drivers
Improving Enrollments & Cost Synergies Aid Adtalem (ATGE)
Per the Zacks analyst, high enrollments in Chamberlain, and Medical and Veterinary segments aid Adtalem. Also, strategic initiatives and cost synergies adds to the growth.
Cambium (CMBM) Plagued by Intense Competition & Inflation
Per the Zacks Analyst, stiff competition in the wireless networking industry and rising research & development costs combined with inflationary pressure are likely to strain Cambium's margins.
Foot Locker (FL) Grapples With Inflationary & Other Headwinds
Per Zacks analyst, Foot Locker has been witnessing a tough macro backdrop including the inflationary pressures. Also, promotional pressures and deleveraged occupancy costs have been hurting margins.
Competition, Higher Interest Rates Ail OUTFRONT Media (OUT)
Per the Zacks Analyst, OUTFRONT Media's near-term outlook seems bleak amidst stiff competition from several advertising channels and rising interest expenses.
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