Friday, March 17, 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 Johnson & Johnson (JNJ), Toyota Motor Corporation (TM) and Infosys Limited (INFY). 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 Johnson & Johnson have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-11.9% vs. +0.8%). The company is facing macroeconomic headwinds like inflationary pressure and rising input costs are hurting margins. Headwinds like generic competition and pricing pressure continue.

Stelara’s upcoming loss of exclusivity in 2023 is a concern. Ongoing staffing shortages and COVID-related disruptions in China are hurting sales of the MedTech unit. Though J&J has taken meaningful steps to resolve its talc and opioid litigation, it continues to remain an overhang on the stock.

However, J&J’s Pharma unit is performing at above-market levels, supported by blockbuster drugs, Darzalex and Stelara, and contribution from newer drugs, Erleada and Tremfya. J&J is focusing on growing its MedTech unit through new products. It is making rapid progress with its pipeline and line extensions.

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

Shares of Toyota Motor have declined -20.9% over the past year against the Zacks Automotive - Foreign industry’s decline of -32.9%. The company is witnessing commodity cost inflation which is expected to weigh on gross margins. Unfavorable foreign currency translations and high R&D expenses are also likely to limit profits.

Thus, investors are advised to wait for a better entry point. However, continued demand for vehicles and robust product lineup are set to fuel sales volumes of Toyota.

To capitalize on the accelerated global shift to green cars, the auto giant is deepening focus on manufacturing electric and fuel-cell vehicles, which will bolster the company’s product competitiveness. Toyota is also committed to returning capital to shareholders via buybacks and dividends, which sparks confidence.

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

Shares of Infosys have underperformed the Zacks Computers - IT Services industry over the past year (-31.4% vs. -22.1%). The company is suffering from increasing anti-outsourcing sentiments in certain countries. Higher subcontractor costs and its compensation revision with a higher variable pay and incentives are weighing on margins. Further, unfavorable currency fluctuations remain a major concern.

However, Infosys is gaining from large deal wins and fast-growing digital services. Its sustained focus on Agile Digital and artificial intelligence (AI) -driven Core services is a tailwind.

Strong demand for its services in cloud, Internet of Things (IoT), cyber security, data and analytics is a key driver. Higher investments by clients in digital transformation, AI and automation are an upside. Solid traction of its CobaltTM cloud portfolio is a positive.

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

Other noteworthy reports we are featuring today include Novartis AG (NVS), Eaton Corporation plc (ETN) and Equinix, Inc. (EQIX).

Director of Research

Sheraz Mian

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>>>