Today's Must Read
Higher Rates Aid Bank of America (BAC) Amid Fee Income Woes
Netflix (NFLX) Benefits from Paid Sharing & Robust Portfolio
Tuesday, November 21, 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 Novo Nordisk A/S (NVO), Bank of America Corporation (BAC) and Netflix, Inc. (NFLX). 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 >>>
Shares of Novo Nordisk have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+81.2% vs. +11.7%). The company beat earnings and revenue estimates in Q3 due to higher GLP-1 product sales. It has one of the broadest diabetes portfolios in the industry. Ozempic and Rybelsus have been performing well in the diabetes market.
Obesity drug Wegovy has been enjoying increasing demand. Label expansions of diabetes and obesity care drugs in cardiovascular and other indications will likely boost sales. Novo Nordisk raised its 2023 view due to higher demand for Ozempic and Wegovy. Its diversifying efforts to develop new treatments are encouraging.
However, stiffer competition from pharma bigwigs like Pfizer, who are likely to eat away from Novo Nordisk’s Diabetes care market share due to serious supply constraints in international markets. Patent expiry and pricing pressure across the diabetes market also remain a woe.
(You can read the full research report on Novo Nordisk here >>>)
Shares of Bank of America have gained +7.6% over the past six months against the Zacks Banks - Major Regional industry’s gain of +9.9%. The company’s third-quarter 2023 results reflect higher revenues and costs. Because of inflationary pressure, overall costs are expected to remain elevated.
The current tough macroeconomic outlook might weigh on the company’s investment banking (IB) business. This, along with the volatile nature of the capital markets, might hurt non-interest income growth.
Despite these headwinds, we believe that higher rates and decent loan demand will keep aiding the company’s net interest income (NII) growth, which the Zacks analyst expects to grow 8.5% this year. The opening of financial centers and improving digital capabilities is expected to further aid the top line.
(You can read the full research report on Bank of America here >>>)
Shares of Netflix have outperformed the Zacks Broadcast Radio and Television industry over the past year (+65.5% vs. +29.3%). The company is benefiting from growing subscriber base thanks to a robust portfolio. Crackdown on password-sharing and the introduction of paid sharing in more than 100 countries, which represents more than 80% of Netflix’s revenue base, is also expected to aid growth.
Netflix’s diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content, has been driving its growth prospects.
However, stiff competition in the streaming space from the likes of Apple, Amazon Prime Video, Disney+, Peacock and Paramount+ is a headwind. Netflix’s leveraged balance sheet and a higher streaming obligation are concerns. Additionally, unfavorable forex is expected to hurt operating income in the fourth quarter of 2023.
(You can read the full research report on Netflix here >>>)
Other noteworthy reports we are featuring today include Johnson & Johnson (JNJ), Abbott Laboratories (ABT) and TotalEnergies SE (TTE).
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>>>