Today's Must Read
New Drugs Boost Novartis (NVS) Amid Generic Competition
Abbott (ABT) Thrives on Rapid Antigen Test Nod and iCGM Scope
Friday, August 28, 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 Verizon Communications (VZ), Novartis (NVS) and Abbott Laboratories (ABT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Verizon shares have lagged the Zacks Wireless National industry in the year to date period (-3.9% vs. -1.3%), though it has handily outperformed rival AT&T (T) on the back of stable financial profile and a disciplined network strategy, including accelerated 5G deployment despite economic uncertainties stemming from the COVID-19 crisis.
The company is changing its revenue mix toward newer growth services like cloud, security and professional services. Focus on online content delivery, mobile video and online advertising should stoke additional growth. Verizon expects to witness strong momentum heading into the second half of 2020, with continued 5G Ultra Wideband deployment in multiple cities across the country.
However, it is facing headwinds in the media business due to sluggish advertising trends. The company operates in a fiercely-competitive U.S. wireless market that strains margins. Also, Verizon is spending heavily on promotion and lucrative discounts to attract customers, which erodes profitability.
Shares of Novartis have lost -0.6% over the past six months against the Zacks Large-Cap Pharmaceuticals industry’s rise of +7.4%. The Zacks analyst believes that Novartis has a strong oncology portfolio and continues to work on developing its immuno-oncology pipeline. Besides, Sandoz is working on further advancing its portfolio of biosimilars and generics.
However, the company tightened its outlook for 2020 due to the pandemic woes. Nevertheless, Cosentyx and Entresto gained a decent market share amid the current scenario. Piqray, Mayzent and Beovu should boost sales too further. The biosimilar portfolio also gains traction from key new approvals. However, pipeline setbacks and generic competition are concerning.
Abbott shares have gained +17.4% over the past three months against the Zacks Medical Products industry’s rise of +5.5%. The Zacks analyst believes that the branded generics and international diabetes businesses should drive growth in the coming quarters. New product launches and acquisitions should boost sales further.
Abbott posted better-than-expected numbers for the second quarter. However, the figures declined year over year. Despite $615 million of COVID-19 diagnostic testing-related sales, this decline was primarily due to the pandemic-led fall in procedure volumes in many businesses.
However, the company’s Diabetes Care, Nutrition, and EPD arms collectively grew more than 9% in the first half of 2020 leveraging on the pandemic situation. Apart from the latest EUA for COVID-19 rapid antigen test, the company also obtained FDA for Libre 2 as an iCGM. It also received CE Mark for TriClip.
Other noteworthy reports we are featuring today include Philip Morris International (PM), Intuitive Surgical (ISRG) and Northrop Grumman (NOC).
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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>>>