Today's Must Read
Qualcomm (QCOM) Rides on Solid Momentum in 5G Chipset Market
Accenture (ACN) Benefits From Buyouts Amid High Talent Costs
Wednesday, January 20, 2021
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 Novartis (NVS), QUALCOMM (QCOM) and Accenture (ACN). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Novartis shares have underperformed the Zacks Large-Cap Pharmaceuticals industry over the past year (+1.4% vs. +6%). The Zacks analyst believes that new launches like Piqray, Mayzent and Beovu should boost sales. The biosimilars portfolio also gains traction with new approvals and should drive growth.
However, Sandoz’s generics business has been soft. Moreover, pipeline setbacks and generic competition for key drugs weigh on the performance. Meanwhile, Novartis’ performance in 2020 was pretty ho-hum as sales were hit by the coronavirus pandemic.
In particular, dermatology, ophthalmology and Sandoz retail businesses were affected. On a positive note, cardiovascular Entresto maintained momentum on increased patient share across markets, although arthritis drug Cosentyx’s sales were soft. Contributions from Kisqali and gene therapy, Zolgensma, have boosted the performance.
Shares of QUALCOMM have gained +80.1% in the last six months against the Zacks Wireless Equipment industry’s gain of +41.5%. The Zacks analyst believes that Qualcomm is benefiting from investments toward building a licensing program in mobile. The company is focused on retaining its leadership in the 5G chipset market and mobile connectivity.
It resolved a dispute with Huawei and inked a new long-term patent license agreement, which augurs well for long-term revenues. Qualcomm launched low-priced 5G chips for the masses for a seamless transition to 5G while delivering low-power resilient multi-gigabit connectivity.
However, lower handset shipments due to the COVID-19 pandemic remain a near-term headwind. Qualcomm is expected to face softness in demand from China. Over the past years, the company’s margins have declined due to high operating and research and development expenses. Competition from low-cost chip manufacturers like MediaTek is another concern.
Accenture shares have gained +10.5% over the past three months against the Zacks Consulting industry’s rise of +13%. The Zacks analyst believes that the company has been steadily gaining traction in its outsourcing and consulting businesses.
It has been strategically enhancing its cloud and digital marketing suite through acquisitions and partnerships. The company’s strong operating cash flow has helped it reward its shareholders in the form of dividends and share repurchases as well as pursue opportunities in areas that show true potential.
However, pricing pressure due to significant competition from strong companies like Genpact, Cognizant and Infosys, remains a concern. Global presence exposes it to foreign currency exchange rate fluctuations. Buyout-related integration risks continue to remain a concern.
Other noteworthy reports we are featuring today include AbbVie (ABBV), MetLife (MET) and Electronic Arts (EA).
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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>>>