Today's Must Read
Novo Nordisk (NVO) Boasts of Strong Pipeline Amid Competition
Liquidity, High Iron Prices Aid BHP Group (BHP), Demand Ails
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.
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.
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.
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.
Other noteworthy reports we are featuring today include Abbott Laboratories (ABT), Broadcom (AVGO) and Eli Lilly (LLY).
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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>>>