Wednesday, November 16, 2022

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 Novo Nordisk A/S (NVO), Amgen Inc. (AMGN) and Automatic Data Processing, Inc. (ADP). 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 >>>

Novo Nordisk’s shares have gained +1.4% over the year-to-date basis against the Zacks Large-Cap Pharmaceuticals industry’s gain of +4.3%. The company’s promising diabetes drug, Ozempic, is off to a solid start since its launch. The drug remains the growth engine for the company.

The launch of Rybelsus also looks impressive. Novo Nordisk has one of the broadest diabetes portfolios in the industry. Drug sales have been gaining and maintaining momentum. Label expansion of the existing drugs is likely to boost sales.

However, lower realized prices in the United States, loss of exclusivity for products and stiff competition affect sales. Sales are also being negatively impacted by the COVID-19 pandemic. The supply challenges for Wegovy have hurts the stock. The patent expiry on some of the products in Novo Nordisk’s portfolio remains a woe.

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

Amgen’s shares have outperformed the Zacks Medical - Biomedical and Genetics industry over the past year (+37.8% vs. -23.5%). The company’s key drugs like Prolia, Repatha and Xgeva are driving sales. New drugs Lumakras and Tezspire, are off to an encouraging start.

The acquisition of ChemoCentryx, if successfully closed, will add a strategic new growth asset in Tavneos to Amgen’s portfolio. Amgen boasts a strong biosimilars portfolio with potential new products expected to drive long-term growth.

However, increased pricing headwinds and competitive pressure are hurting sales of many of Amgen’s legacy products including some biosimilars. The IRS tax litigation is an overhang on Amgen shares. Estimates have declined slightly ahead of Q3 results. Amgen has a positive record of earnings surprise in recent quarters.

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

Shares of Automatic Data Processing have outperformed the Zacks Outsourcing industry over the past year (+7.0% vs. -2.0%). The company continues to enjoy a dominant position in the human capital management market through strategic buyouts like Celergo, WorkMarket, Global Cash Card and The Marcus Buckingham Company.

It has a strong business model, high recurring revenues, good margins, robust client retention and low capital expenditure. Further, it continues to innovate, improve operations and invest in its ongoing transformation efforts.

However, ADP faces significant competition in each of its product lines. Failure to remain technologically updated might reduce the demand for its solutions and services. Rising expenses due to investment in transformation efforts remains a concern. High debt remains a concern.

(You can read the full research report on Automatic Data Processing here >>>)

Other noteworthy reports we are featuring today include Equinor ASA (EQNR), Duke Energy Corp. (DUK), and Illinois Tool Works Inc. (ITW).

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>>>