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The Zacks Analyst Blog Highlights Microsoft, Novo Nordisk A/S and Lowe's
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For Immediate Release
Chicago, IL – October 27, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Microsoft Corp. (MSFT - Free Report) , Novo Nordisk A/S (NVO - Free Report) and Lowe's Companies, Inc. (LOW - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Q3 Earnings Season Scorecard - Earnings Growth Turns Positive
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features a real-time update on the ongoing Q3 earnings season and new research reports on 16 major stocks, including Microsoft Corp., Novo Nordisk A/S and Lowe's Companies, Inc. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Including all the reports that came out this morning, we now have Q3 results from 209 S&P 500 members or 41.8% of the index's total membership. Total earnings for these 209 index members are up +11.1% from the same period last year on +4.4% higher revenues, with 80.4% beating EPS estimates and 63.2% beating revenue estimates.
This is a notably improved earnings growth trend for this group of 209 index members than we have seen since 2021 Q4. The Q3 revenue growth pace for this group of companies is in-line with the decelerating growth trend that has been in place 2021 Q4.
With respect to the Q3 beats percentages, the EPS beats percentage of 80.4% for this group of 209 index members is unchanged from what we had seen in each of the last two reporting cycles, but otherwise modestly above the average for the last 20 quarters or 5 years of 79.1%.
The Q3 revenue beats percentage of 63.2% is the lowest since the 61.7% for this group of companies in 2020 Q1. The Q3 revenue beats percentage of 63.2% compares to the 5-year low for this group of 209 index members of 56.9% in 2019 Q1 and 5-year average of 69.6%.
Looking Q3 as a whole, combining the actual words that have come out with estimates for the still-to-come companies, total S&P 500 earnings are now expected to be up +0.5% on +1% higher revenues. This is the first time quarterly earnings are on track to be positive after three back-to-back quarters of declines for the S&P 500 index. For more details about the Q3 earnings season and evolving expectatioans for the coming periods, please check out our weekly Earnings Trends report here >>>> The Earnings Picture Continues to Improve
Today's Featured Analyst Reports
Microsoft shares have outperformed the Zacks Computer - Software industry over the year-to-date period (+43.0% vs. +38.4%), with the performance expected to continue following the company's better-than-expected Q3 results. The company continues to gain from strong Intelligent Cloud and Productivity and Business Processes revenues. Intelligent Cloud revenues were driven by growth in Azure and other cloud services.
Productivity and Business Processes revenues rose due to a strong adoption of Office 365 Commercial solutions. Continued momentum in the small and medium businesses, frontline worker offerings and a gain in revenue per user drove the top line. Steady growth in Dynamics products and cloud services aided LinkedIn revenues.
However, continued customer shift to cloud offerings is hurting growth in Office's commercial licensing revenues. Higher operating expenses driven by marketing, LinkedIn and cloud engineering amid intense competition in the cloud space remain a concern.
Shares of Novo Nordisk have outperformed the Zacks Large Cap Pharmaceuticals industry over the year-to-date period (+45.3% vs. +7.2%). The company has one of the broadest diabetes portfolios in the industry. Ozempic and Rybelsus have been performing well in the market. Saxenda and Wegovy sales have been gaining momentum.
Label expansions of diabetes and obesity care drugs will likely further boost sales. Novo Nordisk recently raised its 2023 view due to higher demand for diabetes drug Ozempic and obesity drug Wegovy. Its diversifying efforts to develop new treatments are also encouraging.
However, competition is getting stiffer from pharma bigwigs like Pfizer, who are likely to eat away from Novo Nordisk’s Diabetes care market share, due to serious supply constraints in international markets. Patent expiry and pricing pressure across the diabetes market also remain a woe. Estimates have increased ahead of the Q3 earnings release.
Lowe shares have underperformed the Zacks Building Products - Retail industry over the year-to-date period (-4.6% vs. -4.0%). The company’s outlook reflects the ongoing challenges associated with big ticket discretionary spend and general economic concerns. For the third quarter, the company expects to face challenging year-over-year comparison.
Despite this beat, Lowe's maintained its fiscal 2023 view. It anticipates a 2-4% decline in comps, with a 150-basis point impact from lumber deflation. However, Lowe's is well positioned to capitalize the demand in the home improvement market, thanks to its investments in technology and the robust Pro business segment.
In second-quarter fiscal 2023, the company posted better-than-expected results, benefiting from strong margins stemming from gains from the Total Home strategy, a sturdy spring recovery and the execution of the Perpetual Productivity Improvement initiative.
Other noteworthy reports we are featuring today include HSBC Holdings plc and Ecolab Inc.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Microsoft, Novo Nordisk A/S and Lowe's
For Immediate Release
Chicago, IL – October 27, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Microsoft Corp. (MSFT - Free Report) , Novo Nordisk A/S (NVO - Free Report) and Lowe's Companies, Inc. (LOW - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Q3 Earnings Season Scorecard - Earnings Growth Turns Positive
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features a real-time update on the ongoing Q3 earnings season and new research reports on 16 major stocks, including Microsoft Corp., Novo Nordisk A/S and Lowe's Companies, Inc. 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 >>
Q3 Earnings Season Scorecard
Including all the reports that came out this morning, we now have Q3 results from 209 S&P 500 members or 41.8% of the index's total membership. Total earnings for these 209 index members are up +11.1% from the same period last year on +4.4% higher revenues, with 80.4% beating EPS estimates and 63.2% beating revenue estimates.
This is a notably improved earnings growth trend for this group of 209 index members than we have seen since 2021 Q4. The Q3 revenue growth pace for this group of companies is in-line with the decelerating growth trend that has been in place 2021 Q4.
With respect to the Q3 beats percentages, the EPS beats percentage of 80.4% for this group of 209 index members is unchanged from what we had seen in each of the last two reporting cycles, but otherwise modestly above the average for the last 20 quarters or 5 years of 79.1%.
The Q3 revenue beats percentage of 63.2% is the lowest since the 61.7% for this group of companies in 2020 Q1. The Q3 revenue beats percentage of 63.2% compares to the 5-year low for this group of 209 index members of 56.9% in 2019 Q1 and 5-year average of 69.6%.
Looking Q3 as a whole, combining the actual words that have come out with estimates for the still-to-come companies, total S&P 500 earnings are now expected to be up +0.5% on +1% higher revenues. This is the first time quarterly earnings are on track to be positive after three back-to-back quarters of declines for the S&P 500 index. For more details about the Q3 earnings season and evolving expectatioans for the coming periods, please check out our weekly Earnings Trends report here >>>> The Earnings Picture Continues to Improve
Today's Featured Analyst Reports
Microsoft shares have outperformed the Zacks Computer - Software industry over the year-to-date period (+43.0% vs. +38.4%), with the performance expected to continue following the company's better-than-expected Q3 results. The company continues to gain from strong Intelligent Cloud and Productivity and Business Processes revenues. Intelligent Cloud revenues were driven by growth in Azure and other cloud services.
Productivity and Business Processes revenues rose due to a strong adoption of Office 365 Commercial solutions. Continued momentum in the small and medium businesses, frontline worker offerings and a gain in revenue per user drove the top line. Steady growth in Dynamics products and cloud services aided LinkedIn revenues.
However, continued customer shift to cloud offerings is hurting growth in Office's commercial licensing revenues. Higher operating expenses driven by marketing, LinkedIn and cloud engineering amid intense competition in the cloud space remain a concern.
(You can read the full research report on Microsoft here >>>)
Shares of Novo Nordisk have outperformed the Zacks Large Cap Pharmaceuticals industry over the year-to-date period (+45.3% vs. +7.2%). The company has one of the broadest diabetes portfolios in the industry. Ozempic and Rybelsus have been performing well in the market. Saxenda and Wegovy sales have been gaining momentum.
Label expansions of diabetes and obesity care drugs will likely further boost sales. Novo Nordisk recently raised its 2023 view due to higher demand for diabetes drug Ozempic and obesity drug Wegovy. Its diversifying efforts to develop new treatments are also encouraging.
However, competition is getting stiffer from pharma bigwigs like Pfizer, who are likely to eat away from Novo Nordisk’s Diabetes care market share, due to serious supply constraints in international markets. Patent expiry and pricing pressure across the diabetes market also remain a woe. Estimates have increased ahead of the Q3 earnings release.
(You can read the full research report on Novo Nordisk here >>>)
Lowe shares have underperformed the Zacks Building Products - Retail industry over the year-to-date period (-4.6% vs. -4.0%). The company’s outlook reflects the ongoing challenges associated with big ticket discretionary spend and general economic concerns. For the third quarter, the company expects to face challenging year-over-year comparison.
Despite this beat, Lowe's maintained its fiscal 2023 view. It anticipates a 2-4% decline in comps, with a 150-basis point impact from lumber deflation. However, Lowe's is well positioned to capitalize the demand in the home improvement market, thanks to its investments in technology and the robust Pro business segment.
In second-quarter fiscal 2023, the company posted better-than-expected results, benefiting from strong margins stemming from gains from the Total Home strategy, a sturdy spring recovery and the execution of the Perpetual Productivity Improvement initiative.
(You can read the full research report on Lowe’s here >>>)
Other noteworthy reports we are featuring today include HSBC Holdings plc and Ecolab Inc.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.