Monday April 10, 2017

Today's Research Daily features new research reports on 17 major stocks, including Amazon (AMZN), Celgene (CELG), Facebook (FB) and Walgreens Boots (WBA).

Amazon shares have outperformed the broader market in the year-to-date period (the stock is up +19.3% vs. the +5.1% gain for the S&P 500 as a whole). The company delivered mixed fourth quarter results with only earnings exceeding expectations. A persistent concern in the Amazon story is the company's ever-growing need to build fulfillment centers that continues to weigh on its margins.

However, the analyst likes the company’s solid loyalty system in Prime and its FBA strategy, and content addition continues to add selection to Prime memberships. Also, the AWS generates much higher margins than retail, so it has a very positive impact on Amazon’s profitability. Amazon has agreed to pay $50 million to stream 10 NFL games during the upcoming 2017 season. (You can read the full research report on Amazon here.)

Shares of Celgene have gained +8.5% year to date, underperforming the Zacks Medical - Biomedical and Genetics sector which has gained +2.8% over the same period. Celgene and other drug makers’ shares have remained under pressure given ongoing questions about pricing issues and other regulatory uncertainties.

These issues notwithstanding, Celgene’s multiple myeloma drug Revlimid continues to grow on the back of market share gains and increased duration. The Zacks analyst likes Celgene’s ongoing label expansion efforts and pipeline development. The company anticipates several pipeline-related events over the upcoming quarters and next few years. Estimates remain static ahead of first-quarter results. (You can read the full research report on Celgene here.)

Facebook shares lagged the S&P 500 index following the election, but have more than made up for that underperformance since the start of 2017 - the stock is up +22.3% in the year-to-date period vs. +5.1% gain for the index in that time period. Despite strong results, Facebook, as expected, maintained a cautious stance on future growth prospects. Perhaps far more important to the market is the long-term opportunity for Facebook through monetization of key properties like Instagram, Messenger, WhatsApp and Oculus.

The prospect of higher engagement levels of its huge user base is another key positive in the Facebook story. The company is also dabbling in AR/VR and AI technologies, which also bode well for growth. Estimates have gone up ahead of the upcoming earnings release. (You can read the full research report on Facebook here.)

Shares of Walgreens Boots have done better than the embattled Zacks Retail-Drug Stores industry in the year-to-date period (WBA is down -0.5% vs. decline of -3.6% for the peer group), but the stock has lagged the broader Zacks Retail sector in that same time period. The stock has been helped somewhat by the expected integration synergy related to the impending Rite Aid deal.  

Walgreens Boots reported a dull second-quarter fiscal 2017 with earnings meeting and expectations while sales fell behind. The company appears on track to execute strategic tie-ups and a cost reduction plan that is expected to strengthen margins. A strong balance sheet and a track record of returning excess cash to shareholders (pays an attractive dividend, currently yielding 1.8%) are some of the other positives in the Walgreens story. (You can read the full research report on Walgreens Boots here.)

Other noteworthy reports we are featuring today include DuPont (DD), Qualcomm (QCOM) and 21st Century Fox (FOXA).

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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 >>>