Today's Must Read
New Drugs to Drive Lilly's (LLY) Sales Amid Generic Pressure
Video & Spectrum Mobile Subscriber Gain Aids Charter (CHTR)
Wednesday, November 27, 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 Merck (MRK), Eli Lilly (LLY) and Charter Communications (CHTR). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Merck’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry year to date (+11.7% vs. +6.2%). The Zacks analyst believes that Merck’s products like Keytruda, Lynparza and Bridion are driving sales.
Keytruda sales are gaining from continued uptake in lung cancer and increased usage in other cancer indications. Keytruda has strong growth prospects based on increased utilization, recent approvals for new indications and potential additional approvals worldwide. Animal health and vaccine products are also performing strongly and remain core growth drivers for Merck.
However, generic competition for several drugs and pricing pressure will continue to be overhangs on the top line. Rising competitive pressure on the diabetes franchise and on products like Isentress and Zepatier remains a concern.
Shares of Eli Lilly have gained 5.8% in the past three months against the Zacks Large Cap Pharmaceuticals industry’s rise of 8.1%. The Zacks analyst believes that Lilly’s revenue growth is being driven by higher demand for its newer drugs including Trulicity, Jardiance, Taltz, Verzenio and new migraine drug, Emgality.
Lilly has made significant pipeline progress in the past year with several positive late-stage data readouts, multiple approvals and regulatory submissions. Lilly also added promising new pipeline assets through business development deals.
However, rising competitive pressure on Lilly’s drugs, generic competition for several drugs including Cialis, rising pricing pressure in the United States, price cuts in some international markets, currency headwinds and the impact of the failed Lartruvo study are putting pressure on the top line.
Charter Communications' shares have gained 23.5% over the past six months against the Zacks Cable TV industry's rise of 7.3%. The Zacks analyst believes that the company is benefiting from growth in Internet, mobile, commercial and video revenues.
Increase in Internet speed at no extra cost is also aiding subscriber growth. Additionally, Charter’s spectrum mobile products are gaining traction and subscriber base is increasing rapidly. Launch of spectrum mobile services to small and medium business customers is a key catalyst. Improving free cash flow is a growth driver.
However, commercial revenues continued to suffer due to migration of customers to Spectrum pricing, and packaging from Legacy TWC and Legacy Bright House. Further, Charter persistently loses video subscribers, primarily due to cord-cutting and intense competition from streaming service providers like Netflix and Amazon.
Other noteworthy reports we are featuring today include Intuit (INTU), Alibaba Group (BABA) and Charles Schwab (SCHW).
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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>>>