Top Research Reports for Merck, ConocoPhillips & Adobe

Monday, November 7, 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 Merck & Co., Inc. (MRK), ConocoPhillips (COP) and Adobe Inc. (ADBE). 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 >>>

Merck’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+20.0% vs. +7.6%). The company’s drugs like Keytruda, Gardasil vaccine and Bridion have been driving sales. With continued label expansion into new indications & early-stage settings, Keytruda is expected to remain a key top-line driver.

Animal health and vaccine products are core growth drivers. Its new COVID oral antiviral pill, Lagevrio has become a key top-line driver in 2022. However, generic competition for several drugs and rising competitive pressure, mainly on the diabetes franchise, will continue to be overhangs on the top line.

There are concerns about Merck’s ability to grow its non-oncology business ahead of Keytruda’s loss of exclusivity later in the decade. Merck’s shares have outperformed the industry this year so far.

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

Shares of ConocoPhillips have outperformed the Zacks Oil and Gas - Integrated - United States industry over the past year (+74.2% vs. +72.0%). The company holds a bulk of acres in the unconventional plays of Eagle Ford shale, Permian Basin and Bakken shale. Significant opportunities are there for the firm in the Bakken Shale, where it owns about 750 undrilled locations that could provide access to huge reserves.

COP projects its 2022 production at 1.74 million barrels of oil equivalent per day (MMBoe/d), suggesting an increase from 1.6 MMBoe/d last year. COP’s balance sheet is significantly less leveraged than the industry it belongs to. Also, it approved a $20-billion increase in the existing share repurchase program to $45 billion.

However, COP is highly exposed to oil price fluctuations, which makes things challenging for the company. Also, it been generating lower dividend yield than the industry over the past few years. As such, the stock warrants a cautious stance.

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

Shares of Adobe have underperformed the Zacks Computer - Software industry over the past year (-57.1% vs. -37.2%). The company is facing headwinds for Digital Media segment due to the ongoing tensions between Russia and Ukraine conflict. Nevertheless, Adobe is benefiting from strong demand for its cloud products.

The company’s Creative Cloud, Document Cloud and Adobe Experience Cloud products are helping it drive top-line growth. Rising subscription revenues and solid momentum across the mobile apps remain major positives.

Growth in emerging markets, robust online video creation demand, strong Acrobat adoption and improving average revenue per user remain tailwinds. We remain optimistic about Adobe’s market position, compelling product lines, persistent innovation and solid adoption of Creative Cloud and Adobe marketing cloud.

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

Other noteworthy reports we are featuring today include Marsh & McLennan Companies, Inc. (MMC), Intercontinental Exchange, Inc. (ICE), and Monster Beverage Corp. (MNST).

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>>>

Today's Must Read

Keytruda to Remain Merck's (MRK) Key op Line Driver

ConocoPhillips (COP) Banks On Oil-Rich Bakken Shale Assets

Adobe (ADBE) Rides on Growing Adoption of Cloud Applications

Featured Reports

Rising Revenues Aid Marsh & McLennan (MMC) Despite Cost Woes
Per the Zacks analyst, its increasing top line, courtesy of diverse product offerings and solid client retention rates lead to significant growth. However, higher expenses might squeeze margins.

Intercontinental (ICE) Banks on Buyouts Amid High Costs
Per the Zacks analyst, Intercontinental Exchange is set to grow on a number of acquisitions and cost synergies. However, rising expenses weigh on margins.

Solid Energy Drinks Unit Aids Monster Beverage's (MNST) Sales
Per the Zacks analyst, Monster Beverage continues to gain from strong demand for the energy drinks category as well as new product launches and innovation. This led to sales growth of 15.2% in Q3.

Operating Skills Up Republic Services (RSG), Liquidity Hurts
The Zacks analyst is positive about Republic Services' efforts to increase its operational efficiency by shifting to compressed natural gas collection vehicles. However, low current ratio is a woe.

Expansion Efforts to Aid Restaurant Brands (QSR), Costs High
Per the Zacks analyst, Restaurant Brands is likely to benefit from unit expansion efforts, menu innovation and loyalty program. However, a rise in labor and commodity costs is a concern.

Investment Aid Edison International (EIX), Financial Ail
Per the Zacks Analyst, Edison International's systematic capital investment strategy plan is likely to boost its growth in the long-term. However, company's weak financials remain a bottleneck.

Rising Global Footprint Boosts DoorDash (DASH) Prospects
Per the Zacks analyst, DoorDash strategic acquisitions helping to expand operations globally to drive top line growth and boost market share against strong competition.

New Upgrades

Williams (WMB) to Benefit from Transco-Related Projects
The Zacks analyst believes that Williams' existing and expansionary projects associated with the massive Transco gas transmission system are expected to boost the company's growth prospects.n

Cracker Barrel (CBRL) Rides on Off-premise Business Model
Per the Zacks analyst, Cracker Barrel is benefitting from solid off-premise sales, digital efforts and loyalty program. Also, focus on menu offerings with reduced complexity bode well.

Increasing Demand for Financing Aids Hercules Capital (HTGC)
Per the Zacks analyst, driven by the rise in demand for customized financing and a robust deal pipeline, total new commitments are expected to keep rising. This will aid Hercules Capital's top line.

New Downgrades

Supply-Chain Constraints & High Costs Hurt Flowserve (FLS)
The Zacks analyst is concerned about persistent supply chain constraints and high raw material costs, which are affecting Flowserve's margins and profits.

Qualcomm (QCOM) Plagued by High Inventory, Soft Demand View
Per the Zacks analyst, Qualcomm offered a muted first quarter outlook due to rapid deterioration in demand and high channel inventory amid a challenging macroeconomic environment and uncertainty.

Nu Skin's (NUS) Gross Margin Troubled by Escalated Inflation
Per the Zacks analyst, Nu Skin's gross margin is hurt by inflation. Its third-quarter adjusted gross margin contracted 250 basis points due to inflation, unfavorable product mix and currency rates.

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Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report
 
ConocoPhillips (COP) : Free Stock Analysis Report
 
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
 
Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report
 
Adobe Inc. (ADBE) : Free Stock Analysis Report
 
Monster Beverage Corporation (MNST) : Free Stock Analysis Report
 
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