Friday, June 7, 2024

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), TotalEnergies SE (TTE) and U.S. Bancorp (USB), as well as a micro-cap stock Flanigan's Enterprises, Inc. (BDL). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+82.3% vs. +32.6%) on the back of the drugmaker's weight-loss offerings. The company beat first-quarter earnings and revenue estimates, driven by strong sales of GLP-1 products. Its diabetes drugs Ozempic and Rybelsus and obesity drug Wegovy have been performing well, fueled by increasing demand.

Label expansions of the same in cardiovascular and other indications will likely boost sales. NVO has been tackling the supply constraints of Wegovy by increasing its manufacturing capabilities. The drug is now indicated in the United States to also reduce heart risks, which is a huge boost.

The company is also gearing up to buy Cardior to help diversify its portfolio beyond diabetes treatments and obesity drugs. However, intense rivalry in the obesity sector threatens Novo Nordisk’s market share. Patent expiry and pricing pressure across the diabetes market also remain a woe.

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

Shares of TotalEnergies have gained +8.3% over the past six months against the Zacks Oil and Gas - Refining and Marketing industry’s gain of +8.4%. The company continues to benefit from startups, acquisitions, well-spread LNG assets and contribution from upstream assets located in the new hydrocarbon-producing regions.

Multi-energy assets of TotalEnergies, spread across the globe, support its performance. TotalEnergies is steadily investing in clean power generation and aims to achieve net-zero emissions by 2050.

However, the company’s production might get impacted by security-reasons in some regions. Fluctuating hydrocarbon prices are concerns. The company remains exposed to acquisition-related risks as these assets contribute a sizable volume to production. A natural decline in production and its withdrawal from Russia might affect profitability.

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

U.S. Bancorp shares have underperformed the Zacks Banks - Major Regional industry over the past six months (-1.9% vs. +22.8%). The company is facing rise in expenses and provisions which may weigh on its bottom line in the near term. A concentrated loan portfolio is a woe. The downward estimate revision trend for 2024 raises apprehension.

Nevertheless, U.S. Bancorp has a decent surprise history, with earnings beating estimates in three of the trailing four quarters and missing on the remaining one occasion. First quarter results benefited from growth in fee income and lower.

A solid business model and diverse revenue streams are likely to keep aiding its financials in the upcoming period. Despite a challenging interest rate environment and pressure on deposit levels, the company’s consumer deposits continue to witness decent growth.

(You can read the full research report on U.S. Bancorp here >>>)

Shares of Flanigan's have outperformed the Zacks Retail - Restaurants industry over the past six months (+6.3% vs. +1.0%). This microcap company with market capitalization of $51.22 million has excellent prospects due to its expansion efforts, adaptability to consumer trends, strong sector growth outlook, and innovative business practices may bolster future prospects. Efficient supply chain management and favorable consumer spending trends could also support sustained growth and profitability.

However, recent performance shows an 82.53% drop in net income to $109,000, coupled with a decline in earnings per share from $0.34 to $0.06, potentially eroding investor confidence. Despite a 7.8% increase in revenues to $45.14 million, the company's inability to manage rising costs hints at operational inefficiencies.

Industry challenges, particularly in the restaurant and retail liquor sectors, include higher operational costs and supply chain issues. Limited growth in key segments like franchise and rental incomes poses further investment risks.

(You can read the full research report on Flanigan’s Enterprises here >>>)

Other noteworthy reports we are featuring today include Ford Motor Company (F), Manulife Financial Corporation (MFC) and Diamondback Energy, Inc. (FANG).

Director of Research

Sheraz Mian

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>>>