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Top Research Reports for Microsoft, Novartis & Goldman Sachs

Mark Vickery
Top Research Reports for Microsoft, Novartis & Goldman Sachs

Friday, July 20, 2018

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 Goldman Sachs (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 >>>

Buy-ranked Microsoft’s shares have outperformed the Zacks Technology sector on a year-to-date basis (up +22.1% versus +8.4%) Microsoft’s fourth quarter fiscal 2018 results were impressive. Both earnings and revenues increased on a year-over-year basis.

The Zacks analyst thinks the company 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, the company’s expanding partner base is a key catalyst. However, projections of a moderating growth rate in commercial cloud gross margin, and OEM Pro and Windows commercial businesses is a headwind.

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

Shares of Novartis have underperformed the Zacks Large-Cap Pharmaceuticals industry (-3.7% vs. -1.7%), on a year-to-date basis. Novartis’ beat sales estimate in the second-quarter on strong performance of Cosentyx and Entresto. Earnings, however, fell short. Both drugs continue to perform well driven by underlying demand. The label expansion of oncology drugs also lifted the top line.

Novartis is looking to transform into a core pharma company with focus on additional therapies like gene therapy with the acquisition of Avexis. The company intends to spin-off its ophthalmology division, Alcon, into a separately-traded standalone company and exit its antibacterial and antiviral research program as well.

However, the generic division, Sandoz continues to face pricing pressure in the United States. The division also suffered a blow when the FDA issued a CRL to its generic Advair Diskus. Additionally, the loss of patent protection for key drugs is a cause of concern.

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

Buy-ranked Goldman Sachs’ shares have lost -9.9% year to date, underperforming the -1.8% decline of the Zacks Investment Banking industry. However, the company boasts an impressive earnings surprise history. It surpassed expectations for earnings in all the trailing four quarters.

The company’s second-quarter 2018 results reflected strong Fixed Income, Currency and Commodities (FICC) Client Execution revenues, and a continued momentum in investment banking business. However, elevated expenses were an undermining factor.

Though litigation issues are concerns, the Zacks analyst thinks the company’s well-diversified business and focus to capitalize on growth opportunities through strategic moves will continue to strengthen the overall business. Further, its cost-control measures are commendable. Additionally, the company’s steady capital-deployment activities have boosted investors' confidence, along with the Fed's approval to 2018 Capital Plan.

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

Other noteworthy reports we are featuring today include Starbucks (SBUX), General Motors (GM) and Dominion (D).

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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) Benefits from Azure, Office 365 Strength

Strong Oncology Portfolio Boost Novartis (NVS), Sandoz Lags

Prudent Cost Control & Diversification Supports Goldman (GS)

Featured Reports

Lower Solar Tax Credit Hurts Dominion (D) Amid Rising Demand

The Zacks analyst believes the drop in solar tax credit will hurt Dominion amid the rising demand for electricity from residential customers and data centers.

Kinder Morgan (KMI) to Grow on Fee-Based Deals, Debts High

The fee-based contracts for Kinder Morgan's extensive network of pipeline projects will provide it with stable revenues. However, high debt burden is cause for concern, per the covering analyst.

ADTRAN (ADTN) Drives Industry Transition, High R&D Costs Ail

Per the Zacks analyst, ADTRAN is accelerating the industry's transition to open and scalable networks with R&D efforts despite huge operating costs due to high technological obsolescence of products.

Strong Crossover & Truck Sales Drive General Motors (GM)

Per the Zacks analyst, huge success with crossovers sales in the United States across various brands like Cadillac, Chevrolet, and GMC and robust truck sales are aiding General Motors.

Acquisitions Support People's United (PBCT), High Costs Ail

Per the Zacks analyst, People's United's strong liquidity position makes it well poised to grow through acquisitions.

Starbucks (SBUX) Rides on Digital Offering, Weak Margins Ail

The Zacks analyst believes that Starbucks' solid execution of best-in-class loyalty programs and digital offerings are expected to drive growth.

MWI Unit Aids AmerisourceBergen (ABC), Lash Unit Ails

The Zacks analyst is pessimistic about lower contribution from Lash Consulting business.

New Upgrades

Incyte's (INCY) Jakafi Drives Growth On Strong Patient Demand

Per the Zacks analyst, Incyte's lead drug Jakafi continues to drive growth on the back of strong patient demand. A potential label expansion will boost demand further and fuel the top-line.

Ross Stores' (ROST) Merchandising Efforts to Aid Growth

Per the Zacks analyst, Ross' merchandise initiatives focused on investments in workforce, processes and technology strengthens its buying operation and helps source in-trend goods at best prices.

Revenue Growth & Diversification Aids Northern Trust (NTRS)

Per the Zacks analyst, focus on initiating new business against the backdrop of macroeconomic headwinds should bolster Northern Trust's revenues. Moreover, its diversified products are a tailwind.

New Downgrades

Debt Woes, High Labor & Fuel Costs Hurt Allegiant (ALGT)

The Zacks analyst is concerned about the company's high debt levels. Increased labor and fuel costs also raise concerns. Capacity-related issues are also discouraging.

Elevated Costs, Risky Loans Hurt Washington Federal (WAFD)

Per the Zacks analyst, increasing expenses mainly due to higher compensation and technology costs are likely to hurt Washington Federal's profitability. Also, exposure to risky loans is a concern.

Low Mall Footfall, Store Closures & Bankruptcy to Impact GGP

Per the Zacks analyst, GGP's performance in the near term will be marred by shrinking footfall amid shift toward online channels, store closures and bankruptcy of retailers.

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Starbucks Corporation (SBUX) : Free Stock Analysis Report
Novartis AG (NVS) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
General Motors Company (GM) : Free Stock Analysis Report
Dominion Energy Inc. (D) : Free Stock Analysis Report
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