Today's Must Read
Lilly (LLY) Makes Solid Pipeline Progress Solid in 2019
Strategic Moves Aid PNC Financial (PNC), High Expenses A Woe
Wednesday, December 18, 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 Johnson & Johnson (JNJ), Eli Lilly (LLY) and PNC Financial (PNC). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Johnson & Johnson’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry year to date (+11.2% vs. +10.2%). The Zacks analyst believes that J&J has been witnessing significant generic/biosimilar headwinds in the Pharma unit in 2019.
However, the unit is performing above-market levels, supported by contribution from new drugs like Tremfya and successful label expansion of cancer drugs like Imbruvica and Darzalex and immunology drug, Stelara. J&J is also making rapid progress with its pipeline/line extensions. It has already gained FDA approval for two new drugs in 2019, Balversa and Spravato.
Share buybacks and restructuring initiatives should provide bottom-line support. However, headwinds like biosimilar/generic competition and pricing pressure remain. Moreover, J&J faces numerous lawsuits, which allege personal injuries to patients caused by the use of its products.
Shares of Eli Lilly have gained 9.6% in the past three months against the Zacks Large Cap Pharmaceuticals industry’s rise of 11.1%. 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, as some older drugs like Cialis face generic competition.
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.
PNC Financial's shares have gained +20.4% over the past six months against the Zacks Major Regional Banks industry's rise of +21.4%. The Zacks analyst believes that company's commitment to expand middle market lending franchise and expand its digital products and services offerings bodes well.
Shares of PNC Financial have outperformed the industry over the past three months. Also, it has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters.
Moreover, execution of inorganic strategies in order to diversify revenue sources is likely to continue bolstering fee income. Also, rising loans and deposits balance keep PNC Financial well poised for growth.
However, with growing business and investment in technology the company's expense base is expected to keep escalating, which poses a concern. Also, lack of diversification in loan portfolio is a headwind.
Other noteworthy reports we are featuring today include EOG Resources (EOG), Koninklijke Philips (PHG) and Archer-Daniels-Midland (ADM).
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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>>>