Top Analyst Reports for Microsoft, Novo Nordisk & United Parcel

Sheraz Mian

15 April 2024 at 11:22 am·5-min read

Monday, April 15, 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 Microsoft Corporation (MSFT), Novo Nordisk A/S (NVO) and United Parcel Service, Inc. (UPS). 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 shares have outperformed the Zacks Tech sector over the past year (+46.7% vs. +42.3%), reflecting the company's perceived lead in the artificial intelligence (AI) race. The company is riding on strong growth from Intelligent Cloud and Productivity and Business Processes. Intelligent Cloud revenues are driven by growth in Azure and other cloud services. Productivity and Business Processes revenues continue to increase due to the strong adoption of Office 365 Commercial solutions.

Continued momentum in the small and medium businesses and frontline worker offerings, as well as a rise in revenue per user, drove top-line growth. Microsoft got off to an early lead in the generative AI race, thanks to its work with OpenAI. The general availability of Copilot for Security holds promise.

However, More Personal Computing revenues are suffering from continued weakness in Windows and Devices businesses. Declining gaming revenues have been a headwind.

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

Shares of Novo Nordisk have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+46.8% vs. +17.8%). The company’s 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. Wegovy is now indicated in the United States to also reduce heart risks, which is a huge boost. Novo Nordisk recently received CHMP’s recommendation for the approval of insulin icodec in the EU for diabetes.

Novo Nordisk 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 >>>)

United Parcel shares have underperformed the Zacks Transportation - Air Freight and Cargo industry over the past year (-21.9% vs. -11.1%). The company is witnessing high labor costs arising out of the deal with the teamsters and the weak demand-induced volume woes. Rising capital expenses further add to its woes.

Nevertheless, the Zacks analyst is encouraged by UPS' solid free cash flow. Shareholder-friendly actions includes a 15th consecutive annual dividend increase and a $5 billion share repurchase authorization.

The 2022 UPS-ESW agreement aligns with the thriving cross-border e-commerce trend, especially among millennials and Gen Z. The approval of the five-year deal with the International Brotherhood of Teamsters in August 2023 is a positive development for UPS.

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

Other noteworthy reports we are featuring today include Merck & Co., Inc. (MRK), Booking Holdings Inc. (BKNG) and Elevance Health, Inc. (ELV).

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>>>

Today's Must Read

Microsoft (MSFT) Rides On Solid Office365 And Co-Pilot Adoption

GLP-1 Drugs Boost Novo Nordisk (NVO), Market Rivalry a Woe

UPS Banks on Dividends & Buybacks Amid Shipping Volume Woes

Featured Reports

Keytruda to Remain Merck's (MRK) Key Top-Line Driver
The Zacks analyst expects Keytruda to drive Merck's (MRK) sales and see strong growth for the next 2-3 years despite concerns of how it will grow its business once Keytruda loses patent exclusivity.

Solid Gross Bookings Momentum Aids Booking Holdings (BKNG)
Per the Zacks analyst, growing demand for travel and solid momentum in booked room nights are driving growth in Booking Holdings' gross bookings.

Strategic Buyouts Aid Elevance Health (ELV), Cost Woes Stay
Per the Zacks analyst, a number of growth-related initiatives and an expanding product portfolio are strengthening Elevance Health's market position. However, high expenses put pressure on margins.

Solid Demand Aid Northrop Grumman (NOC), Labor Shortage Ails
Per the Zacks analyst, the rising demand for Northrop Grumman's programs resulted in a 2023 backlog of $84.2 billion. Yet, shortage of labor, especially skilled labor poses a threat for the company.

Church & Dwight (CHD) Benefits From Brand Strength, Pricing
Per the Zacks analyst, Church & Dwight has been benefiting from its brand strength, which in turn is driven by regular innovation and prudent acquisitions. Also, pricing aids amid cost inflation.

Light & Wonder (LNW) Rides on Holistic Growth Model Focus
Per the Zacks analyst, Light & Wonder is likely to benefit from a holistic growth strategy with a diligent focus on automation, standardization, AI tools and process development initiatives.

Product Innovation Aids Acuity Brands (AYI), High Costs Ail
Per the Zacks analyst, Acuity Brands benefits from product innovation and in-organic moves. However, high cost and volatile business environment are concerns.

New Upgrades

Strategic Restructuring Moves Aid Interactive Brokers (IBKR)
Per the Zacks analyst, Interactive Brokers is set to benefit from initiatives to boost market share and operational efficiency. Solid liquidity will keep capital distributions sustainable.

MPLX to Benefit From Capital Investments Toward Expansion
Per the Zacks analyst, MPLX's robust capex forecast for 2024, particularly focused on expansion initiatives, positions it to capitalize on the growing demand for fresh midstream assets.

Strength in Vista & National Pen Units Drive Cimpress (CMPR)
Per the Zacks analyst, strength in Cimpress' Vista and National Pen units, fueled by robust demand for promotional products, apparel and marketing materials, will continue to lend momentum to it.

New Downgrades

Cobre Panama Output Halt, High Cost Ail Franco-Nevada (FNV)
Per the Zacks analyst, the production halt in Cobre Panama mine has been impacting Franco-Nevada's top-line. Elevated energy costs also remain a woe.

Softness in Biopharma Business Hurt Bio-Rad (BIO) Growth
The Zacks analyst is worried about Bio-Rad witnessing reduced demand from biopharma customers for its process chromatography resins.

Softness in New Pool Construction Hurts Pool Corp (POOL)
Per the Zacks analyst, Pool Corp reduced pool construction and deferred discretionary replacement activities likely to hurt Pool. For 2024, it expects new pool construction in units to decrease by 10%

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