Friday, November 11, 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 Amazon.com, Inc. (AMZN), Sanofi (SNY) and Target Corporation (TGT). 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 >>>

Shares of Amazon.com have declined -45.2% over the past year against the Zacks Internet - Commerce industry’s decline of -48.6% and the -17.1% decline in the S&P 500 index.

Weighing on Amazon's near-term outlook is the view that the company's strong growth during Covid resulted from pulled forward revenues from future periods that need to be accounted for over the next few quarters. The company is also believed to have over-hired during the pandemic, as a result of which its cost base has signficantly increased.

These near-term headwinds aside, it is gaining on solid Prime momentum owing to ultrafast delivery services and strong content portfolio. Strengthening relationship with third-party sellers is another positive.

Also, growing momentum across Amazon Music is contributing well. Additionally, strong adoption rate of AWS is aiding the company’s cloud dominance. Expanding AWS services portfolio is continuously helping Amazon in gaining further momentum among the customers.

Further, robust Alexa skills and expanding smart home products portfolio are positives. Additionally, the company’s strong global presence and solid momentum among the small and medium businesses remain tailwinds. Considering the abovementioned facts, the Zacks analyst expect 2022 revenue to be up 11% from 2021.

(You can read the full research report on Amazon.com here >>>)

Sanofi’s shares have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-12.7% vs. +10.7%). The company is facing headwinds include weak performance of diabetes drugs and generic competition for many drugs. However, Sanofi’s Specialty Care unit is on a strong footing, particularly with the regular label expansion of Dupixent.

Dupixent has become the key top-line driver for Sanofi. With outside U.S. revenues accelerating and multiple approvals for new indications expected in the near future, its sales are expected to be higher. Sanofi possesses a leading vaccine portfolio, which has become the primary top-line driver. Its R&D pipeline is strong.

Several data read-outs are expected in 2022. Sanofi’s Consumer unit is delivering above market sales growth. Sanofi has also launched several new drugs in the past couple of years and is expanding its pipeline through M&A deals.

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

Target’s shares have declined -24.7% this year vs. Walmart's -1.5% drop and the S&P 500 index's -18.2% drop. The market has been unwilling to give Target credit for the inventory growth issue that came through in its April-quarter report in May. This is a relatively favorable set up for the stock should next week's quarterly report turns out to be better than what the market fears.

Target has been deploying resources to enhance omni-channel capabilities, come up with new brands, refurbish stores and expand same-day delivery options to provide customers seamless shopping experience.

Target has been making multiple changes to its business model to adapt and stay relevant in the dynamic retail landscape. These have been contributing to the top line. We believe that Target’s attempt to right-size inventory is the step in the right direction, as the demand skewed toward consumer staples and away from discretionary categories.

However, this hurt margins as was visible in the second quarter of fiscal 2022 but better position the company to gain market share. The Zacks analyst expect top line to increase 3% and 4.2% in the third- and fourth-quarter, respectively. For the back half of the year, we expect operating margin to improve sequentially.

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

Other noteworthy reports we are featuring today include Humana Inc. (HUM), General Dynamics Corporation (GD), and The PNC Financial Services Group, Inc. (PNC).

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>>>