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Top Stock Reports for Merck, Thermo Fisher Scientific & American Express

Wednesday, February 15, 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 Merck & Co., Inc. (MRK), Thermo Fisher Scientific Inc. (TMO) and American Express Co. (AXP). 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 >>>

Merck’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+39.8% vs. +11.8%). Drugs like Keytruda and Gardasil (HPV vaccine) have been driving sales. With continued label expansion into new indications & early-stage settings, Keytruda is expected to remain a key top-line driver.

Animal health and vaccine products are core growth drivers. Its new COVID oral antiviral pill, Lagevrio, has become a key top-line driver in 2022. Merck boasts a strong cancer pipeline, including Keytruda, which should help drive long-term growth.

However, generic competition for several drugs and rising competitive pressure, mainly on the diabetes franchise, will continue to be overhangs on the top line. There are concerns about Merck’s ability to grow its non-oncology business ahead of Keytruda’s loss of exclusivity later in the decade.

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

Shares of Thermo Fisher Scientific have outperformed the Zacks Medical - Instruments industry over the past year (+2.7% vs. -12.0%). The company’s robust year-over-year revenue growth in the Analytical Instruments and the Laboratory Products and Biopharma Services segments appears promising.

Thermo Fisher’s accelerated investments to expand bioproduction capacity also buoy optimism. In the quarter, Thermo Fisher witnessed strength in three out of its four end markets. The upbeat guidance for 2022 is indicative that this growth momentum will continue.

However, the year-over-year decline in revenues in the Life Science Solutions and Specialty Diagnostics segment is disappointing. The contraction of both margins on escalating costs and expenses does not bode well either. The year-over-year decline in adjusted earnings is concerning.

(You can read the full research report on Thermo Fisher Scientific here >>>)

Shares of American Express have declined -8.6% over the past year against the Zacks Financial - Miscellaneous Services industry’s decline of -17.7%. Due to higher utilization of the company’s cards, expense in the form of card member services and card member rewards is likely to go up and strain the company's margins. Also, marketing and business development expenses are expected to rise, hurting the bottom line. As such, the stock warrants a cautious stance.

Nevertheless, American Express have adopted several growth initiatives, such as launching new products, enhancing existing features, reaching new agreements and forging alliances, are boosting its revenues. Consumer spending on travel and entertainment, which carry higher margins for AmEx, is advancing well.

The company’s balance sheet looks strong with manageable debt. Solid cash-generation abilities enable the pursuit of business investments and capital deployment via share buybacks and dividends.

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

Other noteworthy reports we are featuring today Valero Energy Corp. (VLO), Enphase Energy, Inc. (ENPH) and Weyerhaeuser Co. (WY).

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 op Line Driver

Thermo Fisher (TMO) Banks on PPD Buyout Amid Stiff Rivalry

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Robust Revenues & Cash Flows Aid American Express (AXP)

Featured Reports

Valero (VLO) Gains on Higher Gulf Coast Refinery Throughput
The Zacks analyst is impressed by Valero's Gulf Coast refineries contributing the most to its total throughput volumes. Higher Gulf Coast export volumes will also support its margins.

Expanding Solar Market Aid Enphase (ENPH) Amid Supply Woes
Per the Zacks analyst, the expanding solar market tends to benefit Enphase. However, constrained component supply conditions may adversely impact its revenues and results of operations.

Operational Excellence Aids Weyerhaeuser (WY), Low Sales Hurt
Per the Zacks analyst, Weyerhaeuser's focus on operational excellence plans is encouraging. However, weak demand & macroeconomic uncertainty raise concern.

Hewlett Packard (HPE) Benefits From Spurt in Aruba Services
Per the Zacks analyst, a strong uptick in Aruba Services is driving Hewlett Packard's Intelligent Edge segment, which in turn, helps sustain its supremacy in the market with high growth opportunity.

Strong End Market Aids Berry Global (BERY), High Debt Hurts
Per the Zacks analyst, Berry Global will benefit from strength across food service, hygiene, retail food and beverage end markets. However, the company's high debt level remains concerning.

Digital Transformation, Buyouts Aid DXC Technology (DXC)
Per the Zacks analyst, DXC Technology is benefiting from ongoing digital transformations and adoption of its solutions. Also, strategic acquisitions like Virtual Clarity and Bluleader are a positive.

Cirrus Logic (CRUS) Benefits From Strong Product Portfolio
Per the Zacks analyst, Cirrus Logic's performance benefitted from strong revenue growth across all business segments. However, stiff competition is a major headwind.

New Upgrades

Conagra's (CAG) Organic Sales Benefit From Robust Pricing
Per the Zacks analyst, Conagra has been gaining from its inflation-induced pricing actions. In second quarter, organic sales growth was backed by a 17% jump in price/mix, which rose across all units.

Everest Re (RE) to Grow on Better Pricing, Solid Retention
Per the Zacks analyst, Everest Re is poised to grow on disciplined cycle management, new business opportunities, continued double-digit rate increases and strong renewal retention on existing business

Jabil (JBL) Remains Poised to Benefit from Demand Resiliency
Per the Zacks analyst, Jabil is likely to benefit from strong secular tailwinds in areas such as automotive, healthcare, renewable energy infrastructure, 5G wireless and cloud.

New Downgrades

Higher Costs, Geopolitical Woes Hurt Moelis & Company (MC)
Per the Zacks analyst, elevated costs due to Moelis & Company's hiring spree and rising inflation will hurt profits. Geopolitical and macroeconomic concerns add to ambiguity in the operating backdrop.

Dull Demand & Lower Inventory Ails Newell's (NWL) Performance
Per the Zacks analyst, Newell has been witnessing inventory reductions and muted consumer demand for general merchandise categories. These headwinds are likely to persist in 2023.

JetBlue Airways (JBLU) Hit Hard by Operating Cost Woes
The Zacks analyst is worried about the elevated operating expenses. High costs are hurting JetBlue's bottom line. JBLU's liquidity position is bothersome too.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

American Express Company (AXP) : Free Stock Analysis Report

Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report

Weyerhaeuser Company (WY) : Free Stock Analysis Report

Valero Energy Corporation (VLO) : Free Stock Analysis Report

Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report

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Zacks Investment Research