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Top Stock Reports for AbbVie, PepsiCo & Walt Disney

Zacks.com logo Zacks.com 11/22/2022

Tuesday, November 22, 2022

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 AbbVie Inc. (ABBV), PepsiCo, Inc. (PEP) and The Walt Disney Company (DIS). 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 >>>

AbbVie’s shares have handily outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+35.9% vs. +13.4%) on the back of favorable outlook for its cancer drugs and pipeline of drugs. The company has successfully expanded the labels of its cancer drugs, Imbruvica and Venclexta. It has several new drugs in its portfolio, which have the potential to drive revenues once Humira loses U.S. exclusivity in 2023.

Skyrizi and Rinvoq have established outstanding launch trajectories bolstered by the approval in new indications. It has several early/mid-stage candidates that have blockbuster potential.

However, there are concerns about long-term sales growth once Humira generics enter the U.S. market. Increasing competition from newer therapies is hurting Imbruvica’s sales. Slowing consumer demand due to economic pressures is affecting sales of the aesthetics franchise.

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

Shares of PepsiCo have modestly outperformed the Zacks Beverages - Soft drinks industry over the past year (+12.6% vs. +11.1%). The company’s revenues and earnings beat the Zacks Consensus Estimate and improved year over year in the third quarter. This marked the 17th straight quarter of sales beat.

PepsiCo benefits from the resilience and strength of global beverage and convenient food businesses. It expects to benefit by delivering convenience, variety and value proposition to customers through its brands. It raised its revenue view for 2022.

However, PepsiCo witnessed margin pressures in the third quarter driven by impacts of supply-chain disruptions and inflationary labor, transportation and commodity costs. PEP anticipates incremental input cost inflation for the balance of 2022. Adverse currency rates also remain headwinds.

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

Walt Disney shares have reacted favorably to the leadership change announcement, but the stock has otherwise been laggard (down -38.6% vs. -18.3% for the S&P 500 index). The company’s profitability was negatively impacted by higher programming and production costs across Disney+, ESPN+ and Hulu. Disney’s leveraged balance sheet remains a concern.

However, the company’s fourth-quarter fiscal 2022 results reflected strength in Disney+ and revival in Parks, Experiences and Products businesses. The company benefits from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering.

Availability in the Nordics, Latin America and other Asian territories is helping it expand its user base. Theme Park business is likely to gain from strong demand across both the domestic and international parks. Per capita spending increased 6% year over year, while occupancy at domestic hotels was 90% in the fiscal fourth quarter.

(You can read the full research report on The Walt Disney here >>>)

Other noteworthy reports we are featuring today include Caterpillar Inc. (CAT), Harley-Davidson, Inc. (HOG), and PBF Energy Inc. (PBF).

Sheraz Mian

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

AbbVie's (ABBV) Skyrizi, Rinvoq Key to Long-Term Growth

Momentum in PepsiCo's (PEP) Snacking Business to Aid Growth

Disney+ Growth & Revival of Parks Business Aids Disney (DIS)

Featured Reports

Solid Sales in U.S. Segment Aid Aflac (AFL), Cost Woes Ail

Per the Zacks analystp, its U.S. segment backed by product innovations and increased face-to-face interactions fuel growth. However, expense woes persist.

Rising Rates Support BNY Mellon (BK), High Costs A Concern

Per the Zacks analyst, global footprint, rising interest rates and strong balance sheet are likely to keep aiding BNY Mellon amid higher costs and the current bearish markets and recessionary fears.

Efficient Hire Buyout & Technology Strength Up Equifax (EFX)

Per the Zacks analyst, acquisition of Efficient Hire boosts Equifax's ability to help clients manage their hiring and employment needs. Also, cloud data and technology transformation is a tailwind.

Surging Orders to Drive Fortive (FTV) Amid High Leverage

Per the Zacks analyst, Fortive's performance is gaining from increased orders for both software and hardware offerings. However, stiff competition and leveraged balance sheet remain concerns.

Pembina Pipeline (PBA) to Gain from Integrated Asset System

The Zacks analyst believes that Pembina Pipeline's integrated system of assets makes it active in almost every point in the midstream value chain but is worried about the company's high debt burden.

Regulatory Nods Aid Abiomed (ABMD) Amid Stiff Competition

The Zacks analyst is upbeat about Abiomed's receipt of a slew of regulatory approvals over the past few months despite its operation in a highly competitive market.

Solid Investment boost OGE Energy (OGE), Weak Solvency Woe

Per the Zacks analyst, OGE Energy's aggressive investment strategy to upgrade its infrastructure tend to boost its long-term growth. Yet, its weak solvency position remains a concern.

New Upgrades

Caterpillar (CAT) to Gain on Strong Demand in End Markets

Per the Zacks analyst, solid backlog, end-market demand and focus on making strategic investments in expanded offerings, services and digital initiatives will drive Caterpillar's results.

Hardwire Plan to Aid Harley-Davidson (HOG) Revenue, Margins

Per the Zacks analyst, Harley-Davidson's Hardwire strategic plan bodes well for long-term growth opportunities. It aims to contribute to revenues and margins and has increased visibility and outreach.

PBF Energy (PBF) Banks on Improving Gross Refining Margin

The Zacks analyst likes PBF Energy's refining operations since the firm is witnessing increasing gross refining margins across East Coast and West Coast.

New Downgrades

Skechers (SKX) Witnesses Higher Operating Costs For a While

Per the Zacks analyst, Skechers' total operating expenses grew 19.5% in third quarter of 2022. Also, selling expenses jumped 18% on rise in global digital and brand demand creation spending.

Supply Chain Issue Hurts MKS Instruments (MKSI) Prospects

Per the Zacks analyst, MKS Instruments is suffering from supply-chain constraints that will hurt its top-line growth in the near term. Stiff competition and customer concentration are headwinds.

Low Volumes Due to Softness in the Markets Ail Leggett (LEG)

Per the Zacks analyst, Leggett has been witnessing soft demand in the U.S. bedding and Home Furniture, Fabric Converting and Flooring markets owing to a challenging global economic environment.

 

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