Today's Must Read
Portfolio Strength Benefits PayPal (PYPL) Amid Competition
Novo Nordisk (NVO) Boasts Strong Pipeline Amid Competition
Friday, September 18, 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 JPMorgan Chase (JPM), PayPal (PYPL) and Novo Nordisk (NVO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
JPMorgan shares have done better than peer group (-29.3% vs. -34.7%), but the stock has nevertheless lagged the broader market given low interest rates and the pandemic-driven economic weakness. That said, the Zacks analyst believes that JPMorgan's robust loan and deposit balances, acquisition of InstaMed, strong liquidity position and initiatives to expand the branch network in new markets will continue supporting profitability.
Also, the company will be keeping the dividend level unchanged in the third quarter, following the clearance of annual stress test results. However, the Fed’s accommodative policy and near-zero rates are expected to hurt the bank’s interest income and margins.
Further, coronavirus-induced economic downturn will likely continue to hamper business activities. Thus, loan growth will likely be muted in the near term.
Shares of PayPal have gained +65.1% over the past year against the Zacks Internet Software industry’s rise of +54.4% on the back of robust growth in total payments volume owing to increasing net new active accounts.
Further, strengthening customer engagement on the company’s platform is a major positive. Also, Venmo’s improving monetization efforts and rising adoption rate across various platforms are aiding the total active accounts. Additionally, growing momentum of core peer to peer and PayPal Checkout experiences is a tailwind.
However, increasing credit loss reserves owing to macroeconomic projections on account of coronavirus is a serious matter of concern. Further, intensifying digital payment competition is a risk.
Novo Nordisk shares have gained +34% over the past six months against the Zacks Large Cap Pharmaceuticals industry’s rise of +22.5%. The Zacks analyst believes that 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.
Other noteworthy reports we are featuring today include Facebook (FB), Roche (RHHBY) and Toyota Motor (TM).
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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>>>