Today's Must Read
Medtronic (MDT) RTG Sales Stay Solid, Rising Diabetes Arm Aid
Novo Nordisk (NVO) Focuses on Pipeline Amid Competition
Friday, August 16, 2019
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 Cisco Systems (CSCO), Medtronic (MDT) and Novo Nordisk (NVO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Cisco’s shares have outperformed the Zacks Computer Networking industry (6.7% vs.5.3%) in the year to date period. The Zacks analyst thinks that weakness in service provider business in China remains a concern.
Cisco delivered stellar Q4 results driven by solid security business and strong contribution from Infrastructure Platforms and applications. However, the company provided cautious outlook. Further, stiff competition from Arista and Juniper in switching and routing verticals is likely to create pricing pressure and impact profitability.
Also, increasing investments on product enhancements are likely to limit margin expansion at least in the near-term. Nevertheless, order strength and improving traction of the subscription-based business model are tailwinds. Strengthening collaboration portfolio, which includes Webex Teams, bodes well.
Shares of Medtronic have outperformed the Zacks Medical Products industry over the past six months, gaining 10.3% vs 5.8%. Medtronic exited fiscal 2019 on a promising note with better-than-expected fourth-quarter numbers.
The Zacks analyst believes that Medtronic’s major business groups contributed to solid top-line growth at CER. Within RTG, the launch of the Mazor X Stealth navigated robotic system is off to a strong start. Diabetes group, although registered a dull quarter this time, the company expects this business to reaccelerate in the first quarter and be accretive to total company growth in fiscal 2020.
Within CVG, despite ongoing challenges, multiple product lines showed exceptional strength in the quarter. The 2020 guidance also looks promising. On the flips side, the declining CRHF revenue raises concern for Medtronic. Escalating costs persistently put pressure on gross margin.
Novo Nordisk’s shares have gained 8.4% in the last three months, outperforming the Zacks Biotech industry, which has lost -2.4% over the same period. Novo Nordisk beat both earnings and sales estimates in the second quarter of 2019. Ozempic, the company’s once-weekly GLP-1, continues to gain market share.
From a regulatory perspective, the company achieved important milestones with the filing of oral semaglutide both in the United States and the EU. With the initiation of four major late-stage clinical trials, the company continues to investigate the clinical benefits of semaglutide across multiple indications. The company also has a strong foothold in diabetes market. Shares of the company outperformed the industry year to date.
Other noteworthy reports we are featuring today include The Southern Company (SO), Eni (E) and TransDigm (TDG).
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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>>>