Thursday, December 22, 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 Novo Nordisk A/S (NVO), AstraZeneca PLC (AZN) and Accenture plc (ACN). 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
Novo Nordisk
have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+20.5% vs. +13.7%). The company has one of the broadest diabetes portfolios in the industry. Drug sales have been gaining and maintaining momentum.
Label expansion of the existing drugs is likely to boost sales further in the days ahead. Promising diabetes drug, Ozempic is off to a solid start since its launch and remains the growth engine for the company. The launch of Rybelsus also looks impressive.
However, lower realized prices in the United States, loss of exclusivity for products and stiff competition can affect sales. The supply challenges for Wegovy have hurt the stock. The patent expiry on some of the products in Novo Nordisk’s portfolio remains a woe.
(You can
read the full research report on Novo Nordisk here >>>
)
AstraZeneca
shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+16.9% vs. +13.7%). The company’s key drugs, mainly cancer medicines, Lynparza, Tagrisso and Imfinzi should keep driving revenues. Its pipeline is strong with several phase III data readouts lined up.
AstraZeneca has also been engaged in external acquisitions and strategic collaborations to boost its pipeline while investing in geographic areas of high growth like emerging markets. Cost-cutting efforts should drive earnings. The Alexion buyout strengthens its immunology franchise, adding several drugs that are boosting its top line.
However, AstraZeneca’s diabetes franchise faces stiff competition while pricing pressure hurts sales in the respiratory unit. Sales are slowing down in its key market, China.
(You can
read the full research report on AstraZeneca here >>>
)
Shares of
Accenture
have modestly underperformed the Zacks Consulting Services industry over the past year (-33.4% vs. -27.6%), with the uncertain corporate spending outlook in a cloudy macroeconomic backdrop as the biggest headwind. The company’s pricing pressure due to significant competition from strong companies like Genpact, Cognizant and Infosys, remains a concern. Global presence exposes it to foreign currency exchange rate fluctuations. Buyout-related integration risks continues to remain a concern.
However, the company has been steadily gaining traction in its outsourcing and consulting businesses backed by high demand for services that can improve operating efficiencies and save costs. The company has been strategically enhancing its cloud and digital marketing suite through buyouts and partnerships.
The company’s strong operating cash flow has helped it reward its shareholders in the form of dividend payments and share repurchases, and pursue opportunities in areas that show true potential.
(You can
read the full research report on Accenture here >>>
)
Other noteworthy reports we are featuring today include Chubb Limited (CB), Pioneer Natural Resources Company (PXD) and Roper Technologies, Inc. (ROP).
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>>>
Today’s Must Read
Novo Nordisk’s (NVO) Diabetes Drugs Aid Growth Amid Rivalry
Cancer Drugs Aid AstraZeneca (AZN) Sales Amid China Impact
Fiftyfive5 Buyout Aids Accenture (ACN) Despite Low Liquidity
Featured Reports
Better Pricing, New Business Growth Drive Chubb Limited (CB)
Per the Zacks analyst, Chubb is set to grow on better pricing, new business growth and high renewal rates. Yet exposure to cat loss induces underwriting volatility while rising costs pressurize margin
Pioneer Natural (PXD) Banks On Oil-Rich Permian Basin Assets
The Zacks analyst believes that Pioneer Natural’s one-million-plus high-quality acreages in the Permian Basin will drive long-term oil production growth. Yet, rising production costs are concerning.
Application Software Backs Roper (ROP) Despite Cost Woes
While the strong performance of the Application Software unit due to strength in Deltek, Vertafore and Aderant businesses bode well for Roper, the Zacks analyst is concerned about cost-inflation.
Restructuring Aids Ameriprise (AMP), Asset Outflows a Woe
Per the Zacks analyst, Ameriprise’s efforts to restructure operations and focus on core businesses will support revenues. Yet, outflows in the Asset Management segment and rising costs are concerns.
Higher Nitrogen Demand and Prices Aid CF Industries (CF)
Per the Zacks analyst, CF Industries will gain from higher demand for nitrogen fertilizers in major markets. Higher nitrogen prices amid lower supply availability will also drive its margins.
Strong Demand, New Products Drive FMC Corp (FMC)
Per the Zacks analyst, strong demand for herbicides and insecticides will drive the company’s top line. It should also gain from efforts to expand product portfolio through new product launches.
Cheesecake Factory (CAKE) Banks on Off-Premise Sales, Costs High
Per the Zacks analyst, Cheesecake Factory’s focus on off-premise offerings and FRC-related differentiated concepts bode well. However, a rise in commodity and labor costs pose concerns.
New Upgrades
America Movil (AMX) Benefits from Increasing Subscriber Base
Per the Zacks analyst, America Movil’s performance is gaining from increasing broadband client base. Focused 5G efforts and the deployment of advanced technologies are other tailwinds
Fortinet (FTNT) Rides on Product Strength, Marketing Efforts
Per the Zacks analyst, Fortinet is gaining from solid contributions of its growth-oriented products Security Fabric, cloud and SD-WAN. Increasing marketing efforts are also a positive.
U.S. Federal clients, Design Services Aids Tetra Tech (TTEK)
Per the Zacks analyst, strong momentum across U.S. Federal clients, driven by new funding for water & environment and Tetra Tech’s design and engineering services will lend momentum to the company.
New Downgrades
Tyson Foods (TSN) Remains Troubled by Increasing Costs
Per the Zacks analyst, Tyson Foods is seeing high cost of goods. It saw year-over-year rise of 20-25% in cost of goods, including feed ingredients, labor, live animals and freight costs in fiscal 2022
Forex Woes, Stiff Rivalry Impedes Align’s (ALGN) Growth
The Zacks analyst is worried about unfavorable foreign currency translation affecting Align Technology’s financials. Stiff rivalry also remains a concern.
The Cooper Companies’ (COO) Contracting Margins is a Concern
Per the Zacks analyst, the contraction of The Cooper Companies’ gross and operating margins during the fiscal fourth quarter is concerning.
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