Today's Must Read
Growing Customer Base & Partnerships Aid ServiceNow (NOW)
Rising Air Traffic Aids Raytheon (RTX) Amid Inflation Woes
Wednesday, October 4, 2023
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 Amgen Inc. (AMGN), ServiceNow, Inc. (NOW) and RTX Corporation (RTX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Amgen shares have outperformed the Zacks Medical - Biomedical and Genetics industry over the year-to-date period (+2.0% vs. -17.5%). The company expects strong sales growth of products like Tezspire, Evenity, Repatha, Prolia and Tavneos to be offset by lower revenues from oncology biosimilars and legacy established products such as Enbrel in the future quarters.
The addition of Horizon Therapeutics, if successfully closed, will enhance Amgen’s growth prospects. Amgen also has some key pipeline assets in obesity and inflammation, which are indications that can have a large market opportunity. Several data readouts are expected in the next 12 months.
However, increased pricing headwinds and competitive pressure are hurting sales of many products, including some biosimilars. Weakness in some key brands like Otezla and Lumakras create potential revenue headwinds.
(You can read the full research report on Amgen here >>>)
Shares of ServiceNow have outperformed the Zacks Computers - IT Services industry over the year-to-date period (+39.4% vs. +15.4%). The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. It had 1724 total customers with more than $1 million in annual contract value at the end of the second quarter.
ServiceNow’s expanding global presence, solid partner base and strategic buyouts are positives. New solutions — Automated service suggestions, Service Request Playbook and Workplace Scenario Planning — are helping it win new customers.
Expanding portfolio with new generative AI solutions is expected to drive top-line growth. Strategic alliances with the likes of Microsoft remain tailwinds. However, ServiceNow is suffering from high inflation, unfavorable forex, stiff competition, and a challenging macro-economic environment.
(You can read the full research report on ServiceNow here >>>)
Shares of RTX have underperformed the Zacks Aerospace - Defense industry over the year-to-date period (-28.8% vs. -18.1%). The appreciating U.S. dollar has been burdening airlines, which may hurt the stock. Also, removals and inspections of engines from A32neo might increase costs for RTX. It may also be affected if China enforces its announced sanctions against RTX’s missile and defense unit.
However, thanks to its wide range of combat-proven defense products, RTX Corporation continues to receive ample orders from the Pentagon and its foreign allies. A steady recovery in commercial air traffic is boosting commercial OEM as well as commercial aftermarket sales for RTX.
Looking ahead, the company expects global air traffic to fully recover to 2019 levels post 2023 and its commercial aircraft volume growth to be up around 20% in 2023. The stock holds a solid solvency position.
(You can read the full research report on RTX here >>>)
Other noteworthy reports we are featuring today include Automatic Data Processing, Inc. (ADP), Petróleo Brasileiro S.A. - Petrobras (PBR) and Canadian Pacific Kansas City Limited (CP).
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>>>