Tuesday, September 8, 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 Disney (DIS), Novo Nordisk (NVO) and BHP Group (BHP). 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 >>>
Disney shares have outperformed the Zacks Media Conglomerates industry in the year to date period (-6.7% vs. -9.6%). The Zacks analyst believes that Disney has been benefitting from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering despite stiff competition.
The availability of Mulan on Disney+ is expected to boost app download. Moreover, upcoming launches in the Nordics, Belgium, Luxembourg, Portugal and Latin America are expected to rapidly expand Disney+’s subscriber base. However, Disney’s businesses continue to be affected by the coronavirus pandemic.
Shanghai Disney Resort re-opened in May and Hong Kong Disneyland Resort, despite reopening in late June, was closed again in July. The pandemic affected Disney’s third-quarter segmental operating income by $3.5 billion. Moreover, a leveraged balance sheet is a significant headwind.
(You can read the full research report on Disney here >>>)
Shares of Novo Nordisk have gained +9.9% over the past six months against the Zacks Large Cap Pharmaceuticals industry’s rise of +8.6%. The Zacks analyst believes that Novo Nordisk has a strong presence in the Diabetes Care market and boasts of a strong pipeline, with focus on therapeutic proteins within insulin. Victoza remains the growth engine for the company.
The initial uptake of Rybelsus looks good. Ozempic, a once-weekly GLP-1, is off to a solid start. The label of Ozempic was further expanded by the FDA to include a cardiovascular indication. Novo Nordisk has one of the broadest diabetes portfolios in the industry. Tresiba, Victoza, Ozempic, Xultophy and Saxenda maintain momentum for the company.
Label expansion of existing drugs will further boost sales for the company. However, lower realized prices in the Unites States, loss of exclusivity for products in hormone replacement therapy and intensifying competition will impact sales. Moreover, the impact of COVID-19 will affect the performance in the upcoming quarters.
(You can read the full research report on Novo Nordisk here >>>)
BHP’s shares have gained +7.2% over the past year against the Zacks Mining – Miscellaneous industry’s rise of +19.3%. The Zacks analyst believes that BHP’s six major projects under development in petroleum, copper, iron ore and potash, will drive growth in the long run.
BHP Group’s fiscal 2020 revenues and earnings declined year over year, and also lagged the respective Zacks Consensus Estimate. Iron ore production rose 4% year over year to a record 248 Mt in fiscal 2020. In fiscal 2021, it expects to produce 244-253 Mt of iron ore. However, the slowdown in global growth due to the impact of the COVID-19 pandemic is likely to impact demand and weigh on results.
Nevertheless, its strong cash flow and focus on lowering debt will help it sail through these turbulent times. The recent surge in iron and copper prices also holds promise. Efforts to make operations more efficient on the back of smarter technology adoption across the entire value chain will bolster margins.
(You can read the full research report on BHP here >>>)
Other noteworthy reports we are featuring today include Abbott Laboratories (ABT), Broadcom (AVGO) and Eli Lilly (LLY).
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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>>>
Today’s Must Read
Featured Reports
Abbott (ABT) Thrives on Rapid Antigen Test Nod and iCGM Scope
The Zacks analyst is looking forward to Abbott’s Rapid Diagnostics arm’s bright prospect on the company’s newly approved $5 rapid antigen test. Libre 2 as an integrated CGM aids Diabetes Care arm.
Broadcom (AVGO) Banks on Wireless Products & Acquisitions
Per the Zacks analyst, strong demand of Broadcom’s wireless solutions, and synergies from acquisitions of CA and Symantec’s infrastructure software business, are expected to boost top-line growth.
Lilly (LLY) Makes Significant Pipeline Progress
The Zacks analyst believes that Lilly is making significant pipeline progress including its efforts to make therapies to treat COVID-19.
LNG Focus, Strong Production Portfolio Aid TOTAL (TOT)
Per the Zacks analyst TOTAL’s focus to develop LNG assets globally and its strong production growth through new startup are going to boost its performance.
Strong Medicare Business Aid Humana (HUM), High Costs Hurt
Per the Zacks Analyst, solid Medicare business have helped the company expand its business, which in turn, has led to top-line growth.
Robust Sensor Unit Drives DexCom (DXCM), Higher Costs a Woe
Per the Zacks analyst, DexCom has been gaining consistently from the Sensor and Transmitter segments. However, increase in operating expenses continues to raise concern.
Manulife (MFC) Benefits From Solid Asia Business and Buyouts
Per the Zacks analyst, Manulife Financial is well poised to grow on its solid Asia business. Moreover, buyouts have aided in increasing the scale of its business lines and strengthening presence.
New Upgrades
Buyouts & Focus on Affordable Homes to Aid D.R. Horton (DHI)
D.R. Horton is well poised for fiscal 2020 given its industry-leading market share, solid acquisition strategy and focus on more entry-level affordable homes, per the Zacks analyst.
Whirlpool’s (WHR) Cost-Control Measures to Drive Margins
Per the Zacks analyst, Whirlpool is gaining from its cost-saving initiatives, which should enhance margins and liquidity. It generated roughly $180 million in cost savings year-to-date.
Acquisition of John Eagle Dealerships to Buoy Lithia (LAD)
The Zacks analyst remains optimistic about the John Eagle dealerships acquired by Lithia, which will add $1.1 billion to the auto retailer’s annualized revenues and boost its prospects.
New Downgrades
Supply-chain Headwinds Concern Ralph Lauren’s (RL) Investors
Per the Zacks analysts, supply-chain disruptions related to COVID-19 and currency headwinds impacted Ralph Lauren’s top line in Q1. Continuity of these trends is likely to hurt Q2 results.
Store Closures Hurt Capri Holdings’ (CPRI) Sales Performance
Per the Zacks analysts, coronavirus-induced store closure hurt Capri Holdings business. Sales fell 66.5% in the first quarter due to stores being closed for an average of about 55% of the period.
Elevated Costs, Increasing Provisions Hurt CIT Group (CIT)
Per the Zacks analyst, elevated expenses mainly due to higher technology costs are expected to hurt CIT Group’s bottom line. Worsening credit quality amid the current crisis will likely hamper growth.
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