Thursday, November 21, 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 Broadcom Inc. (AVGO), Merck & Co., Inc. (MRK) and Qualcomm Inc. (QCOM), as well as a micro-cap stock, Natural Health Trends Corp. (NHTC). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Broadcom’s shares have outperformed the Zacks Electronics - Semiconductors industry over the last two years (+208.0% vs. +157.2%). The Zacks analyst believes that strong demand for the company’s networking products are suitable for addressing the needs of an increasing AI workload and the growing need for fast networking in data centers. The acquisition of VMware has also been a plus.

However, a highly competitive market and a relatively low customer base have remained causes for concern. Also, Broadcom’s frequent acquisitions, like that of VMWare, have escalated integration risks.

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

Merck’s shares have underperformed the Zacks Large Cap Pharmaceuticals industry over the past two years (-8.8% vs. +15.2%). The Zacks analyst believes that generic competition for several drugs and rising competitive pressure, mainly on the diabetes franchise, will continue to be overhangs for the company. Also, there are concerns about Merck’s ability to grow its non-oncology business ahead of Keytruda’s loss of exclusivity later in the decade.

Yet, with continued label expansion into new indications, particularly earlier-stage launches, Keytruda is expected to see continued growth. Animal health and vaccine products have also been core growth drivers.

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

Shares of Qualcomm have underperformed the Zacks Wireless Equipment industry over the past year (+21.0% vs. +43.2%). Per the Zacks analyst, a shift in the shares among OEMs at the premium tier has reduced Qualcomm's near-term opportunity to sell integrated chipsets from its Snapdragon platform.

Aggressive competition in the mobile phone chipset market is also likely to hurt Qualcomm's profits in the future. High operating expenses and R&D costs have remained a headwind. Qualcomm is also expected to face softness in demand from China.

However, with the accelerated rollout of 5G technology, it is benefiting from investments toward building a licensing program in the mobile space. The company formed a strategic collaboration with Google to develop Generative AI digital cockpit solutions.

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

Shares of Natural Health Trends have underperformed the Zacks Consumer Products - Discretionary industry over the past year (+1.8% vs. +21.4%). Per the Zacks analyst, a declining active member base remains the biggest concern for the company. It faces liquidity challenges and high operating expenses. Dependency on key markets and intense competition pose additional risks.

However, expansion into new markets and improvement in cost management bode well.

(You can read the full research report on Natural Health Trends here >>>)

Other noteworthy reports we are featuring today include Shopify Inc. (SHOP), Fiserv, Inc. (FI) and Marsh & McLennan Companies, Inc. (MMC).

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>>>

Today's Must Read

Keytruda to Remain Merck's (MRK) Key Top-Line Driver

Strong Demand for Networking Products Aids Broadcom (AVGO)

Qualcomm (QCOM) Poised to Gain from Transition to Edge Firm

Featured Reports

Fiserv (FI) Gains From Skytef Buyout, Amid High Competition
Per the Zacks analyst, the Skytef acquisition strengthens Fiserv's distribution network and point-of-sale. High competition from other players is an overhang.

Marsh & McLennan (MMC) Strategic Buyouts Aid, Expenses High
Per the Zacks analyst, multiple acquisitions help Marsh & McLennan expand geographically, and diversify its portfolio. However, escalating expenses continue to trim margins.

Increase in New Insurance Written Aid MGIC Investment (MTG)
Per the Zacks analyst, MGIC Investment is set to grow on higher insurance in force and annual persistency, lower claims and a strong capital position. Yet, rising expenses weigh on margin expansion.

Pre-Salt Reserves Help Petrobras (PBR), Debt Mountain Hurts
The Zacks analyst believes Petrobras' stakes in Brazil's lucrative pre-salt oil reservoirs should improve its earnings outlook, but is concerned about the company's massive $44,251 million debt load.

Customer Growth, Investment Aid Pinnacle West Capital (PNW)
Per the Zacks analyst, Pinnacle West is gaining from customer additions, which is creating demand. Investment in infrastructure and energy generation is aiding it to serve customers efficiently.

Quanta (PWR) Benefits From Strong Demand Amid Labor Woes
Per the Zacks analyst, Quanta is benefiting from robust demand for its services and accretive acquisitions. However, labor and supply chain woes are major concerns.

Ongoing Menu Expansion Aids QIAGEN (QGEN), Macro Woes Stay
Per the Zacks analyst, QIAGEN's robust R&D spending to expand the testing menu across key platforms is encouraging. Yet, macroeconomic volatilities, including the challenges in China, raise concerns.

New Upgrades

Corcept (CORT) Rides on Robust Korlym Sales Performance
Per the Zacks analyst, Corcept's sole drug, Korlym, approved for treating Cushing's syndrome, is driving the top-line. The company is also making good progress with its promising pipeline candidates.

Focus on Cost Savings to Bolster McCormick's (MKC) Margins
Per the Zacks analyst, McCormick's focus on cost-saving plans will continue to enhance its margins. The company expects its fiscal 2024 gross margin to increase by 50 to 100 basis points.

Product Rollouts & Growing Merchant Base Aid Shopify (SHOP)
Per the Zacks analyst, Shopify is benefiting from expanding merchant base driven by applications like Shopify Bill Pay, Tax platform, Collective and Marketplace Connect solutions.

New Downgrades

Decline in Vehicle Production, Rising Debt Ail Magna (MGA)
Per the Zacks analyst, lower-than-anticipated vehicle production in North America and Europe is likely to hurt Magna's top-line growth. Rising debt levels are also concerning.

High Costs, Falling Revenues Hurt Affiliated Managers (AMG)
Per the Zacks analyst, weak top-line performance, and elevated costs are major near-term headwinds for Affiliated Managers. The presence of substantial intangible assets on its balance sheet is a woe.

Spectrum Brands (SPB) Struggles With Numerous Headwinds
Per the Zacks analyst, Spectrum Brands has been witnessing geopolitical and macroeconomic uncertainty for a while. In addition, foreign currency translations are acting as deterrents.

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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report

Merck & Co., Inc. (MRK) : Free Stock Analysis Report

Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report

Broadcom Inc. (AVGO) : Free Stock Analysis Report

Fiserv, Inc. (FI) : Free Stock Analysis Report

Shopify Inc. (SHOP) : Free Stock Analysis Report

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