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Top Analyst Reports for Microsoft, Novartis & Novo Nordisk

Mark Vickery

Wednesday, November 13, 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 Microsoft (MSFT), Novartis (NVS) and Novo Nordisk (NVO). 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 >>>

Microsoft’s shares have outperformed the S&P 500 year to date (44.8% vs. 23.7%). The Zacks analyst believes that Microsoft is benefiting from growing user base of its different applications like Office 365 commercial, Dynamics, Outlook mobile and Teams.

Moreover, Azure’s expanding customer base is a key catalyst. Microsoft’s gaming segment is performing well, primarily driven by a combination of Xbox Live, Game Pass subscriptions and Mixer, which are driving user engagement. Further, acquisitions like PlayFab and GitHub expand Microsoft’s total addressable market (TAM) and penetration.

Additionally, latest contract wins from the Department of Defense remain notable. However, projections of a moderating growth rate in commercial cloud gross margin, and OEM Pro and Windows commercial businesses is a headwind. Moreover, stiff competition from the likes of Google, Apple, and Sony is a woe.

(You can read the full research report on Microsoft here >>>)

Shares of Novartis have gained 10.6% in the past six months against Zacks Large-Cap Pharmaceuticals industry’s rise of 6.2%. The Zacks analyst believes that Novartis’ beat on earnings and sales in the third quarter, driven by the solid performance of key drugs like Cosentyx and Entresto, contribution from Zolgensma, and the Xiidra acquisition.

The increase in guidance was encouraging as well. New launches like Piqray and Beovu should further boost the company’s performance in the upcoming quarters. A strong uptake is expected particularly from Beovu as it is the first FDA approved anti-VEGF to offer greater fluid resolution as compared to Eylea.

However, price erosion in the United States has adversely impacted the generic business. Of late, Novartis has restructured its business and spun off the eye-care unit, Alcon, to become a core drug-focused company. However, pipeline setbacks and generic competition for key drugs are concerns.

(You can read the full research report on Novartis here >>>)

Novo Nordisk’s shares have gained 13.4% over the past three months against the Zacks Biotech industry’s rise of 7.4%. The Zacks analyst believes that the company has one of the broadest diabetes portfolios in the industry.

A solid performance from Tresiba, Victoza, Ozempic, Xultophy and Saxenda drove the company’s sales in the year so far. Label expansion of Victoza continues to boost performance. Ozempic, once-weekly GLP-1, continues to gain market share.

The FDA recently approved semaglutide in tablet form under the brand name, Rybelsus. Approval of new drugs will further broaden the company’s portfolio. Shares of the company have outperformed the industry year to date.

However, lower realized prices in the Unites States, loss of exclusivity for products in hormone replacement therapy and intensifying competition within the diabetes and biopharmaceuticals markets will adversely impact sales.

(You can read the full research report on Novo Nordisk here >>>)

Other noteworthy reports we are featuring today include VMware (VMW), Tesla (TSLA) and General Dynamics (GD).

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Mark Vickery

Senior Editor

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>>>

Today's Must Read

Microsoft (MSFT) Strong on High Cloud & Office 365 Adoption

Cosentyx, New Drugs Novartis (NVS) Amid Generic Competition

Novo Nordisk (NVO) Focuses on Pipeline Amid Competition

Featured Reports

Portfolio Strength, Expanding Partner Base Aids VMware (VMW)

Per the Zacks analyst, VMware's diversified product portfolio and expanding partner base that now includes Microsoft, AWS & IBM are driving top-line growth.

Tesla (TSLA) Rides on Model 3 Sales Amid Tariff Concerns

While rising Model 3 deliveries are likely to aid Tesla's top line, the Zacks analyst is concerned about the U.S.-Sino trade tiff as the firm commands a sizable market share in China.

Rising Demand Aids General Dynamics (GD), Competition Hurts

Per the Zacks Analyst, a strong rise in demand for the company's varied defense products leads to organic growth.

Autodesk (ADSK) Banks on Portfolio Strength Amid Macro Woes

Per the Zacks analyst, portfolio strength is helping the company steer past competition in manufacturing space.

Acquisitions Aids TransDigm (TDG), Rising Debt Levels Hurt

Per the Zacks Analyst, TransDigm strengthens its position in proprietary aerospace components' niche markets, through strategic acquisitions.

High Demand of 5G Design & Test Solutions Aid Keysight (KEYS)

Per the Zacks analyst, robust adoption driven by high demand for 5G design and test solutions primarily from telecom vendors, and a strong pipeline for new business bookings are key catalysts.

D.R. Horton (DHI) to Gain From Acquisitions & Solid Backlog

D.R. Horton is poised to perform well in fiscal 2020 on the back of its solid backlog position, acquisition strategy and affordable product offerings across multiple brands, per the Zacks analyst.

New Upgrades

Qualcomm (QCOM) Aims to Benefit from 5G Chipset Design Wins

Per the Zacks analyst, Qualcomm expects to retain its leadership in the chipset market and mobile connectivity with several technological achievements, innovative product launches and 5G design wins.

Restructuring, Cost-Saving Efforts Support Barclays (BCS)

Per the Zacks analyst, Barclays' business simplifying and restructuring efforts will likely continue to help in improving efficiency. Lower expenses driven by its cost-saving efforts will aid profits.

Value Creation Plan Likely to Aid Casey's (CASY) Earnings

Per the Zacks analyst, Casey's Value Creation Plan, which includes price and product optimization strategy, fleet card program and cost containment efforts, will help drive earnings in fiscal 2020.

New Downgrades

Soft Margin at Segments Weigh on FEMSA's (FMX) Bottom Line

Per the Zacks analyst, FEMSA grapples with soft operating margins at FEMSA Comercio's Health and Proximity Divisions on operating expense deleverage. This is partly weighing on earnings performance.

Sluggishness in trivago & Low ADR Hurt Expedia Group (EXPE)

Per the Zacks analyst, Expedia Group is suffering from weakness in trivago segment. Further, low ADR and high-cost marketing channels pose threat to its margins.

Weak Lease Demand Weighs on Triton International (TRTN)

Sluggish leasing demand as a result of the U.S.-China trade tensions makes the Zacks analyst turn bearish on the stock.

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VMware, Inc. (VMW) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Novartis AG (NVS) : Free Stock Analysis Report
Novo Nordisk A/S (NVO) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
General Dynamics Corporation (GD) : Free Stock Analysis Report
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