Monday, June 12, 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), Oracle Corporation (ORCL) and HSBC Holdings plc (HSBC). 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 year-to-date period (-8.1% vs. +2.2%). The company is facing headwinds like generic competition, pricing pressures and loss of exclusivity of on key drugs like Stelara. Though J&J has taken meaningful steps to resolve its talc and opioid litigation, it continues to remain an overhang on the stock.

Nevetheless, J&J’s Pharma unit is performing at above-market levels. Growth in 2023 is expected to be driven by existing products like Darzalex, Tremfya, Erleada, Invega Sustenna and Uptravi, and also continued uptake from new launches, including Spravato, Carvykti and Tecvayli.

The MedTech unit is showing improving trends, driven by recovery in surgical procedures and contribution from new products. J&J is making rapid progress with its pipeline and line extensions.

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

Oracle shares have outperformed the Zacks Computer - Software industry over the past year (+74.5% vs. +36.0%). The company is benefiting from the ongoing momentum across its cloud business, driven by the strong uptake of Oracle Cloud Infrastructure services and Autonomous Database offerings. We expect these trends to be further confirmed following the company's results later this afternoon.

Solid adoption of cloud-based applications, comprising NetSuite Enterprise Resource Planning (ERP), Fusion ERP and Fusion Human Capital Management (HCM), bodes well. Solid demand for the Oracle Dedicated Region Cloud@Customer is anticipated to drive the top line. Partnerships with Accenture and Microsoft is helping Oracle win new clientele.

However, higher spending on product enhancements, especially toward the cloud platform, amid increasing competition in the cloud domain is likely to limit margin expansion.

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

Shares of HSBC have outperformed the Zacks Banks - Foreign industry over the past year (+32.8% vs. +15.1%). The company’s strong capital position, higher rates, an extensive network and business restructuring initiatives will aid HSBC’s financials. The company’s strong brand value and widespread network will help it attract more clients.

HSBC’s plan to exit from the U.S., French and Canadian retail banking business is expected to help it focus more on Asia. Also, buyouts of AXA Singapore insurance assets and L&T Investment Management Limited will expand its presence in the region.

Although efforts to improve market share in the region will support financials, these will lead to a rise in expenses. Management expects expenses to rise 3% this year, and the recent growth initiatives will likely add another 1%. The worsening operating backdrop is another headwind.

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

Other noteworthy reports we are featuring today include NVIDIA Corporation (NVDA), United Parcel Service, Inc. (UPS) and The Cigna Group (CI).

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>>>