Today's Must Read
Expansion Strategy Boosts Equinix (EQIX) Despite Rising Debt
Growth Projects Aid Newmont (NEM) Amid Cost Woes
Monday, July 06, 2020
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 Novartis (NVS), Equinix (EQIX) and Newmont (NEM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Novartis shares have lagged the Zacks Large-Cap Pharmaceuticals industry over the past year (-3.5% vs. +6.9%), but the Zacks analyst believes that solid performance of key drugs like Cosentyx and Entresto, and contributions from Kisqali and gene therapy, Zolgensma, have improved the company's long-term prospects.
Moreover, the company maintained its annual outlook even amid uncertainties related to the coronavirus pandemic. While the impact of forward purchasing will be reversed as the year progresses, these drugs and new launches like Piqray, Mayzent and Beovu should further boost sales.
The biosimilar portfolio also gains traction with new key approvals. However, price erosion in the United States has adversely impacted the generics business. Moreover, pipeline setbacks and generic competition are concerning.
Shares of Equinix have gained +23.5% over the past six months against the Zacks Retail REIT industry’s fall of -23.3%. The need to work remotely amid the pandemic is driving the demand for interconnected data-center space. The Zacks analyst believes that Equinix, with its interconnectivity-focused global data-center portfolio, is well-positioned to benefit from the tailwind.
Equinix added its 9th IBX data center in the Dallas Infomart Data Center campus in June. The $142-million data center expands its footprint in the Dallas metro area. The company also closed a public offering of four series of senior notes, with $2.6 billion in principal amount.
Also, acceleration in cloud adoption is driving growth for its interconnected ecosystems. Equinix has delivered 69 consecutive quarter revenue growth. Yet, capital-intensive activities amid rising debts are concerning. Also, stiff competition may impact pricing power.
Newmont’s shares have gained +22% over the past three months against the Zacks Mining - Miscellaneous industry’s rise of +30.3%. The Zacks analyst believes that the company is likely to gain from a number of projects including the Tanami expansion, Subika Underground and Ahafo mill expansion.
Moreover, the merger with Goldcorp is expected to be value-accretive to its cash flow and generate significant synergies. Higher gold prices are also expected to continue boosting earnings amid market volatility and economic uncertainties. Newmont is also progressing well on its efficiency improvement programs and remains committed to boost shareholders’ value. However, it faces headwinds from higher production costs.
Expected decline in gold production in the second quarter and 2020 is also likely to hurt the company’s margins. It also faces challenges in the copper market. Lower demand in China and stretched valuation are other concerns.
Other noteworthy reports we are featuring today include Enterprise Products Partners (EPD), Manulife Financial (MFC) and Franco-Nevada (FNV).
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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>>>