Today's Must Read
AT&T (T) Remains Focused on 5G Launch, Spectrum Woes Persist
Novo Nordisk (NVO) Sports Stong Pipeline Amid Competition
Friday, May 18, 2018
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 Walmart (WMT), AT&T (T) and Novo Nordisk (NVO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Walmart’s shares have gained +7.3% in the last year, outperforming the Zacks Supermarkets industry's +5.4% gain in the same time period, courtesy of its superb omni-channel initiatives. The Zacks analyst thinks the company’s robust e-commerce initiatives like buyouts, online grocery, improved delivery systems, along with store remodeling and merchandise enhancement efforts have been working well.
These trends helped Walmart post its 15th straight quarter of U.S. comps growth in first-quarter fiscal 2019, wherein earnings and sales rose year over year, with e-commerce sales up 33%. However, gross margin remains strained due to price investments and transport costs. Also, investors are somewhat jittery about the Walmart-Flipkart deal, which is expected to hurt earnings in the near term.
Nevertheless, long-term prospects from the deal look solid, which falls in line with Walmart’s strategy to shift focus to profitable regions (mainly China and India). This is also reflected in Walmart’s decision to merge its UK grocery arm, Asda with Sainsbury.
Shares of AT&T have decreased -14.1% in the last three months, underperforming the Zacks Wireless National industry's fall of -8.1%. AT&T is gearing up to launch the first standards-based mobile 5G services to consumers in multiple U.S. markets by the end of 2018.
The Zacks analyst thinks the company is likely to immensely benefit from its long-pending merger with Time Warner Inc., with the combined entity expected to become a major player in the consolidated telecom-media space. Although the matter remains sub judice, the company is likely to go on the offensive to seek a verdict in its favor.
However, AT&T’s profitability has been hurt with spectrum crunch in a saturated wireless market. In addition, the company’s wireline division is struggling with persistent losses in access lines due to competitive pressure from voice-over-Internet protocol service providers and aggressive triple-play offerings by cable firms. These are weighing on AT&T’s revenues and margins.
Novo Nordisk’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry in the last year (up +19.9% vs. +2.8%). Novo Nordisk’s first-quarter earnings beat estimates while sales missed the same. A strong performance of drugs like Victoza, Tresiba and Saxenda is driving sales in Novo Nordisk's Diabetes segment.
In December 2017, the company received approval for Ozempic (semaglutide) for the treatment of type II diabetes, which was an important approval for the company. However, the Zacks analyst thinks continued growth from Victoza and Tresiba as well as higher contributions from Saxenda and Xultophy will be partly offset by the impact of lower realized prices in the United States, loss of exclusivity for products in hormone replacement therapy, intensifying competition within the diabetes and biopharmaceutical markets and unfavorable macro conditions in several international markets.
Other noteworthy reports we are featuring today include Allergan (AGN), Cigna (CI) and BCE (BCE).
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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>>>