Today's Must Read
Novo Nordisk's (NVO) New Drugs Push Growth in Crowded Market
Datacenter to Aid NVIDIA (NVDA), Soft Gaming Business a Drag
Tuesday, November 20, 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 Sanofi (SNY), Novo Nordisk (NVO) and NVIDIA (NVDA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Sanofi’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past three months, gaining +4.8% vs. +3.4%. Sanofi’s earnings and sales beat estimates in the third quarter. As anticipated, Sanofi returned to sales growth in the quarter.
The Zacks analyst thinks its focus on streamlining operations and pursuing business development deals is encouraging. The company has several new products in its portfolio and candidates in its pipeline that can contribute to long-term growth. Particularly, sales prospects of Dupixent provide reason for optimism, since it could prove to be an important growth driver.
Meanwhile, the acquisitions of Ablynx and Bioverativ have strengthened Sanofi’s position in the rare blood disorders market. The performance of the Vaccines and Consumer Healthcare franchises has also improved of late. However, headwinds include a bleak outlook for the Diabetes franchise, generic competition for many drugs and slower-than-expected uptake of new products like Praluent.
Shares of Novo Nordisk have underperformed the Zacks Large Cap Pharmaceuticals industry year to date (down -15.3% vs. +9%). Novo Nordisk reported in line earnings but beat sales estimates in third-quarter 2018. However, the Zacks analyst remains optimistic about Ozempic and results for oral semaglutide. It is looking forward to make the first oral GLP-1 treatment available for people with type II diabetes.
The company also made some organizational changes aimed at boosting innovation in its R&D organization and redirecting resources in other parts of the organization to drive growth further. The company’s acquisition of Ziylo will provide it with the latter’s synthetic glucose binding molecules that will enable it to develop glucose responsive insulins. The company’s expansion of its biopharm business also bodes well.
NVIDIA’s shares have underperformed the Zacks General Semiconductor industry year to date (down -25.2% vs. -8.3%). NVIDIA recently reported dismal third-quarter fiscal 2019 results with both top and the bottom-line results falling short of expectations.
Weakness in the Gaming segment, affected by an excess inventory of midrange Pascal products, impacted the company’s results. Inventory level of midrange Pascal gaming cards remained higher-than-expected as demand from gamers failed to grow rapidly to offset the soft crypto currency-related requirement. Consequently, shipments were badly hurt as the price of graphic cards remained elevated.
However, the Zacks analyst thinks NVIDIA’s sustained efforts toward attaining a robust position in several emerging industries remain encouraging. Growth opportunities in ray-traced gaming, rendering, high-performance computing, AI and self-driving cars are expected to be the company’s consistent tailwinds.
Other noteworthy reports we are featuring today include ONEOK (OKE), Fifth Third Bancorp (FITB) and Continental Resources (CLR).
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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>>>