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The Zacks Analyst Blog Highlights: Johnson & Johnson, Merck & Co, Novartis, PayPal and IBM

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For Immediate Release

Chicago, IL – April 7, 2020 – 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: Johnson & Johnson (JNJ - Free Report) , Merck & Co (MRK - Free Report) , Novartis (NVS - Free Report) , PayPal (PYPL - Free Report) and IBM (IBM - Free Report) .

Here are highlights from Monday’s Analyst Blog:

Top Stock Reports for J&J, Merck, Novartis & More

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 Johnson & Johnson, Merck & Co and Novartis. 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 >>>

Johnson & Johnson’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past six months (+0.8% vs. +0.1%). The Zacks analyst believes that J&J is witnessing significant generic/biosimilar headwinds in the Pharma unit.

However, the unit is performing above-market levels driven by new drugs like Tremfya and successful label expansion of cancer drugs like Imbruvica and Darzalex and immunology drug, Stelara. Several pivotal data readouts and regulatory milestones are expected in 2020.

Headwinds like biosimilar/generic competition and pricing pressure remain. J&J faces numerous lawsuits, which allege personal injuries to patients caused by the use of its products. These lawsuits have resulted in uncertainty. Estimates have gone down ahead of Q1 results due to uncertainty about the impact of the coronavirus pandemic on results. J&J has a positive record of earnings surprises in the recent quarters.

Shares of Merck have lost -5.8% over the past year against the Zacks Large Cap Pharmaceuticals industry’s fall of -4.2%. The Zacks analyst believes that Merck’s products like Keytruda, Lynparza and Bridion are driving sales. Keytruda has strong growth prospects based on increased utilization, recent approvals for new indications and potential additional approvals worldwide. Animal health and vaccine products remain core growth drivers.

The potential separation into two companies makes strategic sense as the remaining Merck should be able to achieve higher profits than the combined company. However, generic competition for several drugs, rising competitive pressure, mainly on the diabetes franchise and uncertainty surrounding coronavirus pandemic are some top-line headwinds. Estimates have declined slightly ahead of Q1 results. Merck has a positive record of earnings surprises in recent quarters.

Novartis’ shares have lost -11.5% over the past three months against the Zacks Large-Cap Pharmaceuticals industry’s fall of -10.1%. The Zacks analyst believes that solid performance of key drugs like Cosentyx and Entresto, and contribution from gene therapy, Zolgensma, have boosted performance in recent times and offset the impact of generic competition for legacy drugs.

New launches like Piqray, Mayzent and Beovu should further boost sales. The biosimilar portfolio also gains traction with new key approvals. Novartis’ decision to restructure its business is a positive and should boost the pharma segment. The deep pipeline is encouraging as well.

However, price erosion in the United States has adversely impacted the generic business. Moreover, pipeline setbacks and generic competition for additional drugs are concerning.

Other noteworthy reports we are featuring today include PayPal and IBM.

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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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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