Top Stock Reports for Novartis, Zoom Video & Caterpillar

Thursday, September 17, 2020

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 (NVS), Zoom Video Communications (ZM) and Caterpillar (CAT). 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 in the year to date period (-4% vs. +1.1%). But the Zacks analyst is optimistic about the company's outlook given solid performance of key drugs like Cosentyx and Entresto and new launches like Piqray, Mayzent and Beovu that should boost Novartis’ sales amid a slowdown due to the ongoing pandemic.

The biosimilar portfolio has also gained traction with new key approvals and is expected to drive growth. Novartis’ efforts to develop and diversify its pipeline are also impressive. However, price erosion in the United States has adversely impacted the generics business.

Moreover, pipeline setbacks and generic competition for key drugs are concerning. Shares have underperformed the industry in the past year. The company has tightened its outlook for 2020 due to the pandemic woes.

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

Zoom Video has emerged as one of the biggest beneficiaries of the pandmeic and the associated work-from-home environment. The company's execution has been flawless, as evident from its market share gains relative to bigger and better-capitalized competitors like Microsoft (MSFT), Cisco (CSCO) and others.

The market has rewarded the stock accordingly, up +382.4% over the past year against the Zacks Internet Software industry’s rise of +57.7%. The Zacks analyst believes that Zoom Video should continue to gain traction from the coronavirus-induced remote-working and online-learning wave in second-quarter fiscal 2021.

The company added record number of subscribers. Enterprise customer base also grew rapidly. Easy to deploy, use, manage and solid scalability make Zoom Video’s software more popular among its customers. Moreover, the company’s expanding international presence is a key catalyst.

Its efforts to eliminate the security and privacy loopholes as well as new hardware and Zoom From Home solution’s launch are expected to help in expanding clientele. The company’s strong free cash-flow generating ability is noteworthy. However, acute competition from the likes of Microsoft and Cisco in the video-communication space does not bode well.

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

Caterpillar shares have gained +50% over the past six months against the Zacks Construction and Mining industry’s rise of +48.2%. The Zacks analyst believes that the company’s results this year are likely to be impacted by a weak backlog and weakness in non-residential construction.

Caterpillar’s global retail sales fell 20% in August 2020, marking the ninth consecutive month of decline on weak demand amid the COVID-19 pandemic. Estimates for Caterpillar’s third quarter and current year have undergone negative revisions lately. However, the manufacturing sector seems to be coming out of the pandemic-induced crisis on gradual resumption of the global economic activities and reopening of businesses.

This will be a positive for Caterpillar. Further, the company’s focus on cost reduction will help boost margins. Strong liquidity position, investments in expanded offerings and services, and digital initiatives including e-commerce will fuel growth.

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

Other noteworthy reports we are featuring today include Stryker (SYK), Clorox (CLX) and LHC Group (LHCG).

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Sheraz Mian

Director of Research

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

New Drugs Boost Novartis (NVS) Amid Generic Competition

Work-From-Home & Online Learning Wave Aids Zoom Video (ZM)

Cost Control to Buoy Caterpillar (CAT) Amid Weak Demand

Featured Reports

Core MedSurg Unit Aids Stryker (SYK), Pricing Pressure Ails

Per the Zacks analyst, Stryker continues to gain from solid prospects of its core MedSurg arm. However, pricing pressure continues to remain a woe.

Clorox's (CLX) IGNITE Strategy Likely to Boost EBIT Margin

Per the Zacks analyst, Clorox has been benefiting from its cost-saving efforts, especially the IGNITE strategy.

Organic Growth in Hospice Admissions Aids LHC Group (LHCG)

The Zacks analyst is bullish about the recent finalization of LHC Group's JV partnership with Orlando Health. Growth in hospice admissions is encouraging.

Expansion Strategies Aid Evercore (EVR), Rising Costs Ail

Per the Zacks analyst, Evercore's efforts to expand investment banking business geographically might support revenue growth.

PRA Group (PRAA) Banks on Acquisitions Amid Escalating Costs

Per the Zacks analyst, strategic initiatives like acquisitions and collaborations should enhance its capabilities, which in turn, positions it well for growth.

New Upgrades

Aegion (AEGN) Rides on Insituform North America Business

Per the Zacks analyst, Insituform North America business' leading market position, and strength and stability of municipal water and wastewater markets to drive growth for Aegion.

Equinor (EQNR) to Gain From Strong Focus on Renewable Energy

The Zacks analyst appreciates Equinor's strong focus on renewables since the world is gradually moving away from fossil fuel to clean energy.

New Downgrades

JetBlue (JBLU) Hit by Passenger Revenue Woes, Capacity Cuts

The Zacks analyst is worried about the coronavirus-induced decline in passenger revenues (down 51.6% in first-half 2020). Moreover, trimmed capacity is elevating unit costs.

Soft Foodservice Unit a Worry for Post Holdings (POST) Sales

Per the Zacks analyst, Post Holdings looks troubled by Foodservice unit concerns. The pandemic-led lower away-from-home demand in various foodservice channels hurt the company's third-quarter sales.

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Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
 
Stryker Corporation (SYK) : Free Stock Analysis Report
 
Novartis AG (NVS) : Free Stock Analysis Report
 
LHC Group, Inc. (LHCG) : Free Stock Analysis Report
 
The Clorox Company (CLX) : Free Stock Analysis Report
 
Caterpillar Inc. (CAT) : Free Stock Analysis Report
 
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