Friday, May 15, 2020

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 JPMorgan Chase (JPM), AbbVie (ABBV) and Royal Dutch Shell (RDS.A). 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 >>>

JPMorgan’s shares have outperformed the Zacks Major Regional Banks industry over the past year (-22% vs. -30.9%). The Zacks analyst believes that the acquisition of InstaMed, new branch openings and focus on credit card business will continue aiding its financials.

The bank surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters. Its first-quarter 2020 results were adversely impacted by a huge reserve build, which was done to combat coronavirus-induced economic slowdown. Also, the Fed’s accommodative policy and near-zero interest rates are expected to hurt the bank’s interest income and margins.

Further, coronavirus-induced concerns will likely continue to hamper business activities. Thus, loan growth will likely be muted in the near term. Challenges in expanding mortgage operations and significant dependence on capital market revenues will hurt fee income growth to an extent.

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

Shares of AbbVie have gained +1.5% over the past six months against the Zacks Large-Cap Pharmaceuticals industry’s rise of +4.8%. The Zacks analyst believes that sales erosion due to direct biosimilar competition to Humira in international markets is a big headwind. Also, the decline in HCV drug Mavyret’s sales is a concern.

AbbVie beat Q1 estimates for earnings and sales. However, it expects the COVID-19 crisis to hurt its business in Q2. Nonetheless, AbbVie’s key drug, Humira continues to see strong demand trends in the United States. AbbVie has been successful in expanding labels of its cancer drugs, Imbruvica and Venclexta.

It has an impressive late-stage pipeline. It gained approvals for two new drugs with significant potential, Skyrizi (risankizumab) and Rinvoq, in 2019. Both are off to a strong start. Allergan’s acquisition should diversify AbbVie’s revenue base and accelerate its non-Humira business.

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

Royal Dutch Shell’s shares have lost -39.9% over the past three months against the Zacks International Integrated Oil industry’s fall of -33.4%. The Zacks analyst believes that the company's position as a key supplier of LNG should benefit its long-term cash flow growth on the back of attractive growth opportunities.

Royal Dutch Shell’s Q1 earnings beat was overshadowed by its historic dividend cut. While Europe's largest oil company surpassed profit expectations on higher LNG sales volumes, the commodity price collapse forced the supermajor to trim its payout for the first time since World War II.

Shell is also making solid progress toward the transition to a renewable energy-focused future. But there are worries over the company’s drop in upstream production and its poor reserve replacement ratio.  

(You can read the full research report on Royal Dutch Shell here >>>)

Other noteworthy reports we are featuring today include Lockheed Martin (LMT), Gilead Sciences (GILD) and Anthem (ANTM).

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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>>>