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Top Research Reports for Novartis, Lowe's & Goldman Sachs

Thursday, October 6, 2022

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Novartis AG (NVS), Lowe's Companies, Inc. (LOW) and The Goldman Sachs Group, Inc. (GS). 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 >>>

Novartis shares have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-6.2% vs. +7.7%). The company is facing generic competition for key drugs, and pipeline setbacks also remain a concern.

Nevertheless, Novartis has a strong and diverse portfolio. Solid momentum in key brands like psoriasis drug Cosentyx, cardiovascular drug Entresto, gene therapy Zolgensma, the oncology portfolio, and the launch of Kesimpta continue to boost performance. The launch of additional drugs like Pluvicto, Piqray, Leqvio and Mayzent, and the label expansion of key drugs should also boost its performance further.

The pipeline progress is also impressive, and the company has some promising candidates. Management’s focus on cost savings should boost the bottom line as well. The company recently decided to spin off its generics business Sandoz into a separate entity to focus on its core pharma business.

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

Lowe's shares have outperformed the Zacks Building Products - Retail industry over the past two years (+18.1% vs. +5.5%). The company remains well positioned to capitalize on demand for the home improvement market, backed by investments in technology, merchandise and strength in its Pro business.

Earnings performance benefited from strong operating margin, stemming from gains from the Total Home strategy and the execution of the Perpetual Productivity Improvement initiative. Focus on driving growth boosted margins.

The Total Home strategy has been resonating well with Pro and DIY customers for a while. Management is committed to enhancing its Pro offerings, expanding the company’s market share and driving its operating margin.

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

Goldman Sachs shares have underperformed the Zacks Financial - Investment Bank industry over the past year (-21.5% vs. -15.6%). The company’s decline in equities revenues is likely to hurt the Global Market segment. A rise in the expense base will hinder the bottom line. Also, legal hassles and higher dependence on overseas revenues are woes.

However, Goldman Sachs has a decent earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed in the other. The company continues to expand organically and bolster its digital consumer banking platform.

Other than business diversification, robust client engagement, a solid position in announced and completed mergers and acquisitions (M&As), and a decent investment banking (IB) backlog are likely to aid in navigating weaker markets. Also, its robust liquidity position will help sustain capital deployments.

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

Other noteworthy reports we are featuring today include U.S. Bancorp (USB), Twitter, Inc. (TWTR), and Xcel Energy Inc. (XEL).

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

Cosentyx, Entresto Fuel Novartis (NVS) Amid Competition

Lowe's (LOW) Digital & Pro Businesses Appear Encouraging

Digital Lending Platform Aids Goldman (GS), High Costs Ail

Featured Reports

Loan Growth Supports U.S. Bancorp (USB), Higher Costs a Woe
The Zacks Analyst believes that a solid business model and initiatives to expand market share have helped U.S. Bancorp witness growth in loans and deposits. However, mounting expenses are headwinds.

Twitter (TWTR) Drives on Improving User Engagement Level
Per the Zacks analyst, Twitter's focus on making tweeting easier for people and more expressive is helping in improving engagement levels.

Infrastructure Investment & Clean Assets Aid Xcel Energy (XEL)
Per the Zacks analyst, Xcel Energy's investment of $26 billion through 2026 to enhance clean electricity generation and strengthen its infrastructure will boost its profitability.

Stiff Competition & Low Current Ratio Hurt Gartner (IT)
The Zacks analyst is worried about a weakening current ratio, indicating that Gartner may face problems in meeting its short-term debt obligations. Also, high peer pressure is a headwind.

Pembina Pipeline (PBA) to Gain from Integrated Asset System
The Zacks analyst believes that Pembina Pipeline's integrated system of assets makes it active in almost every point in the midstream value chain but is worried about the company's high debt burden.

New Customers, Robust Omnipod DASH Sales Aid Insulet (PODD)
The Zacks analyst is bullish about solid new customer gains and increasing volume growth through the U.S. pharmacy channel of Insulet. Also, the robust global uptake of Omnipod DASH seems encouraging.

CNO Financial (CNO) Strong on Lower Expenses, Acquisitions
Per the Zacks analyst, lower costs driven by the company's cost-containment program might aid margins. Buyouts expanded its capabilities and distribution reach.

New Upgrades

Splunk (SPLK) Gains Momentum From Solid Order Trends
Per the Zacks analyst, Splunk's performance is gaining from high net retention and competitive win rates alongside solid momentum with large orders overall.

Focus on Digital Solutions Aid Builders FirstSource (BLDR)
Per the Zacks analyst, Builders FirstSource gains from its focus on investment in innovations and enhancing digital solutions. Cost synergies and strategic acquisitions are added positives.

Solid Demand, Margin Expansion Efforts to Aid O-I Glass (OI)
Per the Zacks analyst, O-I Glass will gain from the growing consumer preference for glass as the healthy, premium and sustainable packaging option. Its margin-expansion initiative will aid earnings.

New Downgrades

United Therapeutics (UTHR) Dependence on PAH Drugs A Concern
United Therapeutics is a leader in treating pulmonary arterial hypertension (PAH) and markets four drugs. However the lack of product and pipeline diversification beyond PAH concerns the Zacks Analyst

Higher Costs, Geopolitical Woes Hurt Moelis & Company (MC)
Per the Zacks analyst, elevated costs due to Moelis & Company's hiring spree and rising inflation will hurt profits. Geopolitical and macroeconomic concerns add to ambiguity in the operating backdrop.

Dismal Visitation Likely to Hurt MGM Resorts (MGM) Prospects
Per the Zacks analyst, MGM Resorts is experiencing limited visitation in Macau owing to coronavirus crisis. Also, lack of frictionless travel between Macau, Hong Kong and Mainland China is a concern.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
Xcel Energy Inc. (XEL) : Free Stock Analysis Report
Novartis AG (NVS) : Free Stock Analysis Report
Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report
U.S. Bancorp (USB) : Free Stock Analysis Report
Twitter, Inc. (TWTR) : Free Stock Analysis Report
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