Tuesday, July 12, 2022

Zacks Research Daily features top research results from our team of analysts. Today’s Research Daily features new research reports on 16 major stocks, including The Coca-Cola Co. (KO), Merck & Co., Inc. (MRK) and Toyota Motor Corp. (TM). These research reports have been handpicked from the approximately 70 reports published today by our team of analysts.

You can see all research reports from today here >>>

Coca Cola shares have outperformed soft drink industry Zacks Beverages over the past year (+17.9% vs. +9.4%). The company’s revenue and net income exceeded estimates for the fifth consecutive quarter. The Zacks analyst believes results benefited from the company’s strategic transformation and the ongoing global recovery.

Strength in the majority of markets, market investments, recovery in some markets as well as the cycle of impacts from last year’s pandemic supported volumes. The company has maintained its optimistic view of 2022. It is on track to benefit from innovations and the acceleration of digital investments.

However, pressures from higher supply chain costs, including transportation and input costs, persist. Higher marketing spend is also a concern. Additionally, the unfavorable currency is expected to hurt revenue and net income in the second quarter and in 2022.

(You can read the full Coca-Cola research report here >>>)

Merck shares have outperformed industry Zacks Large Cap Pharmaceuticals over the past year (+25.9% vs. +19.1%). The company’s drugs like Keytruda, Lynparza and Bridion have boosted sales. With the label’s continued expansion into new indications and early-stage settings, Keytruda is expected to remain a leading key driver.

Animal health and vaccines are the main growth drivers. Its novel COVID oral antiviral pill, Lagevrio, will be a key revenue driver in 2022. Merck has a strong pipeline of cancer products, including Keytruda, which should help drive long-term growth.

However, generic competition for several drugs and increasing competitive pressure, primarily on the diabetes franchise, will continue to dominate sales. There are concerns about Merck’s ability to grow its non-oncology business before Keytruda’s loss of exclusivity later in the decade.

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

Toyota engine shares are down -13.4% over the past year against the decline of -30.8% in the auto industry Zacks Automotive – foreign. The Zacks analyst believes the company is reeling from a severe war-worsened chip crunch.

Unprecedented raw material inflation, supply chain disruptions, a tough labor market, logistical challenges and manufacturing inefficiencies will create headwinds and squeeze margins. High capital expenditures and R&D are also likely to reduce margins and cash flow in the short term.

However, Toyota’s electrification push, including investment in BEVs, hybrids, batteries and fuel cell vehicles, should bolster the outlook. It aims to generate 40% of its global sales from electric vehicles by 2025 and 70% by 2030. The expanding portfolio of product lines, a robust lineup of trucks and SUVs, partnerships with Hino, Subaru and Mazda will direct its long-term growth.

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

Other noteworthy reports we are featuring today include HSBC Holdings plc (HSBC), Enbridge Inc. (ENB) and Regeneron Pharmaceuticals, Inc. (REGN).

Marc Vickery
Senior Writer

Note: Sheraz Mian leads the equity research department at Zacks and is a well-known expert on overall earnings. He is frequently quoted in the written and electronic press and publishes the weekly Earnings Trends and Revenue overview reports. If you would like to receive an email notification whenever Sheraz publishes a new article, please click here>>>