Top Stock Reports for Coca-Cola, Merck & Honeywell

Thursday, November 12, 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 Coca-Cola Company (KO), Merck (MRK) and Honeywell International (HON). 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 >>>

Coca-Cola shares have underperformed the Zacks Soft Drinks Beverages industry in the year to date period (-4.1% vs. -1.3%). The Zacks analyst believes that it is poised to gain from the streamlining of portfolio and accelerating investments to expand digital presence due to a shift in consumer preference.

However, continued pressures in the away-from-home channel, which account for nearly half of its revenues, hurt revenue growth. It also lost global value share in NARTD beverages on negative channel mix.

Meanwhile, gains from aggressive cost management aided the bottom line in the third quarter. Moreover, revenues surpassed the Zacks Consensus Estimate. Although the earnings and sales declined on a year-over-year basis, the company’s third-quarter revenues and volume reflected improved trends from the second quarter. 

(You can read the full research report on Coca-Cola here >>>)

Shares of Merck have lost -5.8% over the past year against the Zacks Large Cap Pharmaceuticals industry’s rise of +8.3%. The Zacks analyst believes that generic competition for several drugs and rising competitive pressure, mainly on the diabetes franchise, will continue to be overhangs on the top line.

Sales of some key products like Gardasil 9 vaccine are being hurt due to COVID-19-related business disruption. Meanwhile, Merck beat Q3 estimates for both earnings and sales. Merck drugs like Keytruda, Lynparza and Bridion have been driving sales. Keytruda sales are gaining from continued uptake in lung cancer and increasing usage in other cancer indications.

Animal health and vaccine products remain core growth drivers. The potential separation into two companies makes strategic sense as the remaining Merck should be able to achieve higher profits than the combined company.

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

Honeywell’s shares have gained +61.9% over the past six months against the Zacks Diversified Operations industry’s rise of +44.9%. The Zacks analyst believes that strength in defense and space businesses as well as solid demand for warehouse automation products are likely to boost Honeywell’s revenues in the quarters ahead.

Solid demand for personal protective equipment, along with a strong backlog conversion rate, will act as tailwinds. Increased commercial and operational excellence initiatives are likely to improve its near-term profitability. It is committed to rewarding shareholders handsomely.

However, the company believes that the coronavirus outbreak-led market downturn and weak commercial aerospace will adversely impact its near-term results. Given its extensive geographic presence, its business is subject to political, economic and geopolitical issues. Rise in debt levels can increase its financial obligations.

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

Other noteworthy reports we are featuring today include Wells Fargo (WFC), 3M Company (MMM) and General Electric (GE).

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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

Coca-Cola (KO) Boosts Digital Investments Amid Pandemic

Key Drugs Drive Merck's (MRK) Sales Amid Generic Woes

Intelligrated Unit Drives Honeywell (HON), Weak Demand Ails

Featured Reports

Loan Growth Supports Wells Fargo (WFC) Amid Low Rates

Per the Zacks analyst, organic growth remains a key strength at Wells Fargo. Higher revenues reflect improving loan and deposit balances.

3M (MMM) Gains From Solid Product Demand Amid Pandemic Woes

Per a Zacks analyst, 3M Company (MMM) is benefitting from solid demand for certain products, especially respirators.

Debt Reduction Moves to Aid General Electric (GE) Amid Pandemic

Per a Zacks analyst, General Electric (GE) is poised to benefit from the company's moves to lower its Industrial and GE Capital debts.

TJX Companies (TJX) to Gain on Strength in Home Categories

Per the Zacks analyst, TJX Companies is likely to gain from strength in its Home categories. Notably, the company's HomeGoods and Homesense chains saw robust sales in the second quarter.

Fiserv (FISV) Rides on Strategic Business Moves, Product Suite

The Zacks analyst likes Fiserv's acquisition strategy to widen its client base and enhance its product portfolio. High debt may limit the company's future expansion and worsen its risk profile.

Sinopec (SNP) Banks on Oil & Gas Discoveries, Refining Weak

The oil and gas production outlook looks bright for Sinopec, however, weak refining business concerns the Zacks analyst.

Investment on Clean Assets & Infrastructure Aid Dominion (D)

Per the Zacks analyst, Dominion's planned investment in the range of $23.9B through 2022 to enhance clean electricity generation and strengthen its infrastructure will boost its profitability.

New Upgrades

Recovery in Global Markets Likely to Aid Hilton (HLT)

Per the Zacks analysts, Hilton is likely to benefit from the gradual improvement in travel demand across the globe. Most of the hotels around the globe are operating at breakeven levels or better.

Halozyme's (HALO) ENHANZE Technology Drives Revenue and Deals

Per the Zacks analyst, Halozyme's ENHANZE technology is the key driver of revenues in the form of royalties. It also helps the company to enter new partnerships creating future revenue options.

3D Systems (DDD) Rides on Recovering Demand & Cost Savings

Per the Zacks analyst, 3D Systems is benefiting from rising demand across healthcare and industrial markets. Moreover, a simplified cost structure post restructuring is expected to aid profitability.

New Downgrades

Lyft (LYFT) Suffers From Coronavirus-Led Weakness in Rides

The Zacks analyst is concerned about the significant decline in Lyft's revenues due to coronavirus-led softness in ride volumes.

Steep Operating Costs Deter ZTO Express' (ZTO) Potential

The Zacks analyst is concerned about the elevated operating expenses (up 36.2% in first-half 2020). Coronavirus-related supply-chain issues are also impeding growth.

Puma's (PBYI) High Reliance On Nerlynx for Revenues a Woe

Per the Zacks analyst, Puma Biotech's heavy dependence on breast cancer drug, Nerlynx for revenues is a concern. Stiff competition from other companies in the target market also remains a headwind.

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Wells Fargo & Company (WFC) : Free Stock Analysis Report
 
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
 
3M Company (MMM) : Free Stock Analysis Report
 
CocaCola Company The (KO) : Free Stock Analysis Report
 
Honeywell International Inc. (HON) : Free Stock Analysis Report
 
General Electric Company (GE) : Free Stock Analysis Report
 
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