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Top Analyst Reports for Bank of America, Novo Nordisk, & Novartis

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·6 min read
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Tuesday, May 24, 2022

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 Bank of America Corp. (BAC), Novo Nordisk A/S (NVO), and Novartis AG (NVS). 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 >>>

Bank of America shares have declined -14.6% over the past year against the Zacks Banks - Major Regional industry’s decline of -16.6%. However, the company’s first-quarter 2022 results benefited substantially from loan growth and higher rates.

The Zacks analyst believes that the opening of financial centers, enhancement in digital capabilities and cost-saving efforts will likely keep aiding profits. Supported by robust loan growth and the investment banking (IB) pipeline, the company’s top line is expected to keep improving.

Bank of America is expected to keep enhancing shareholder value through impressive capital deployments. However, despite the expected rate hikes in 2022, relatively low rates might hurt margins and interest income for some time in the near term. The volatile nature of the trading business is concerning as it might hamper fee income growth.

(You can read the full research report on Bank of America here >>>)

Shares of Novo Nordisk have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+34.2% vs. +20.0%) on the back of one of the broadest diabetes portfolios in the industry. Ozempic, Rybelsus, Xultophy and Saxenda have been helping the company maintain momentum. Label expansion of these existing drugs is expected to further boost sales.

However, lower realized prices in the Unites States, loss of exclusivity for products and stiff competition are affecting sales. Sales are also being negatively impacted by the COVID-19 pandemic. Also, the supply challenges for Wegovy have hurt the stock. The patent expiry on some of the products in Novo Nordisk’s portfolio is concerning too.

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

Novartis shares have gained +3.7% in the year to date period against the Zacks Large Cap Pharmaceuticals industry’s gain of +5.1%. Novartis’ performance in the first quarter, in fact, was good as the lagging Sandoz business returned to growth and cardiovascular drug Entresto maintained its stellar performance.

The Zacks analyst believes that drugs like Cosentyx, Entresto, Kesimpta, gene therapy Zolgensma, Kisqali and Leqvio should continue to fuel growth and offset the impact of generic competition. The launch of additional drugs like Pluvicto, Piqray, Leqvio and Mayzent, and the label expansion of key drugs should also aid performance. However, generic competition for key drugs and pipeline setbacks poses concerns.

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

Other noteworthy reports we are featuring today include Petróleo Brasileiro S.A. - Petrobras (PBR), Analog Devices, Inc. (ADI), and Sony Group Corp. (SONY).

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

Loans, Cost Management Aid BofA (BAC) Amid Fee Income Woes

Novo Nordisk's (NVO) Diabetes Drugs Aid Growth Amid Rivalry

New Drugs Fuel Novartis (NVS), Generic Competition A Headwind

Featured Reports

Clean Assets, North America Focus Aid Clearway Energy (CWEN)
Per the Zacks analyst Clearway Energy is gaining by generating electricity from renewable energy sources to meet rising demand and focus on domestic market saves it from currency risks.

SONY to Gain from Brand Focus & Improving G&NS Segment Sales
Per the Zacks analyst, Sony's focus on the premium segment of the branded products market to boost growth is a tailwind. The company expects G&NS Segment sales to be driven by higher hardware sales.

Strategic Alliances Aid Omnicell (OMCL), Weak Margins Ail
The Zacks analyst is optimistic about Omnicell's long-term sole source agreements with top U.S. health systems. Yet, contraction of both margins on escalating operating costs does not bode well.

Boyd Gaming (BYD) Banks on Expansion Efforts, Costs High
Per the Zacks analyst, Boyd Gaming is likely to benefit from its interactive gaming platform, FanDuel Group partnership and portfolio expansion.

Travelers' (TRV) Auto & Homeowners Aids, Cat Loss Hurts
Per the Zacks analyst, persistent progress and strong market of the auto and homeowners businesses contribute to revenue growth of the company. However, exposure to catastrophe loss remains a headwind

Loan Growth Supports U.S. Bancorp (USB) Despite Higher Costs
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.

EOG Resources (EOG) Banks on Delaware & Bakken Shale Plays
Per the Zacks analyst, EOG Resources' strong footprint in oil-rich Delaware and Bakken shale plays has made the firm's production outlook bright. However, rising lease & well expenses are concerning.

New Upgrades

GATX Rides on Railcar Leasing Market & Pro-Investor Steps
The Zacks analyst is optimistic about GATX's impressive record with respect to dividends and buybacks. Moreover, a gradual improvement in the North American railcar leasing market is a bonus.

Petrobras (PBR) Aided by Brazil's Pre-Salt Oil Reserves
The Zacks analyst believes that Petrobras' stake in Brazil's huge pre-salt oil reserves puts it in an enviable position to maintain an impressive production growth profile for years to come.

BMS Solutions & Solid Radio Systems Aid Analog Devices (ADI)
Per the Zacks analyst, Analog Devices is riding on growing momentum of Battery Management System solutions in electric vehicles and solid adoption of advanced radio systems in 5G infrastructure.

New Downgrades

Chip Scarcity & High Commodity Costs to Hurt Winnebago (WGO)
The Zacks analyst is of the view that microchip shortage and scarcity of various RV components may weigh on Winnebago's sales. Rising prices of raw materials would further dent margins.

Kohl's (KSS) Hurt by Product Cost Inflation, SG&A Expenses
Per the Zacks analyst, Kohl's gross margin remains troubled by product and freight cost headwinds. Also, increased growth investments and wage costs among other factors are likely to raise SG&A costs.

Universal Health's (UHS) Margins Hurt by High Operating Costs
Per the Zacks Analyst, higher operating expenses continue to put pressure on the company's margins. Rise in COVID-19 patient volumes are hampering patient volumes in behavioral health care facilities.

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
Bank of America Corporation (BAC) : Free Stock Analysis Report
Novartis AG (NVS) : Free Stock Analysis Report
Analog Devices, Inc. (ADI) : Free Stock Analysis Report
Petroleo Brasileiro S.A. Petrobras (PBR) : Free Stock Analysis Report
Novo Nordisk AS (NVO) : Free Stock Analysis Report
Sony Corporation (SONY) : Free Stock Analysis Report
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