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Top Stock Reports for Cisco, Medtronic & Novo Nordisk

Mark Vickery

Friday, August 16, 2019

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 Cisco Systems (CSCO), Medtronic (MDT) and Novo Nordisk (NVO). 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 >>>

Cisco’s shares have outperformed the Zacks Computer Networking industry (6.7% vs.5.3%) in the year to date period. The Zacks analyst thinks that weakness in service provider business in China remains a concern.

Cisco delivered stellar Q4 results driven by solid security business and strong contribution from Infrastructure Platforms and applications. However, the company provided cautious outlook. Further, stiff competition from Arista and Juniper in switching and routing verticals is likely to create pricing pressure and impact profitability.

Also, increasing investments on product enhancements are likely to limit margin expansion at least in the near-term. Nevertheless, order strength and improving traction of the subscription-based business model are tailwinds. Strengthening collaboration portfolio, which includes Webex Teams, bodes well.

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

Shares of Medtronic have outperformed the Zacks Medical Products industry over the past six months, gaining 10.3% vs 5.8%. Medtronic exited fiscal 2019 on a promising note with better-than-expected fourth-quarter numbers.

The Zacks analyst believes that Medtronic’s major business groups contributed to solid top-line growth at CER. Within RTG, the launch of the Mazor X Stealth navigated robotic system is off to a strong start. Diabetes group, although registered a dull quarter this time, the company expects this business to reaccelerate in the first quarter and be accretive to total company growth in fiscal 2020.

Within CVG, despite ongoing challenges, multiple product lines showed exceptional strength in the quarter. The 2020 guidance also looks promising. On the flips side, the declining CRHF revenue raises concern for Medtronic. Escalating costs persistently put pressure on gross margin.

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

Novo Nordisk’s shares have gained 8.4% in the last three months, outperforming the Zacks Biotech industry, which has lost -2.4% over the same period. Novo Nordisk beat both earnings and sales estimates in the second quarter of 2019. Ozempic, the company’s once-weekly GLP-1, continues to gain market share.

From a regulatory perspective, the company achieved important milestones with the filing of oral semaglutide both in the United States and the EU. With the initiation of four major late-stage clinical trials, the company continues to investigate the clinical benefits of semaglutide across multiple indications. The company also has a strong foothold in diabetes market. Shares of the company outperformed the industry year to date.

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

Other noteworthy reports we are featuring today include The Southern Company (SO), Eni (E) and TransDigm (TDG).

Today's Best Stocks from Zacks

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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

Security Business Aids Cisco (CSCO) Despite China Exposure

Medtronic (MDT) RTG Sales Stay Solid, Rising Diabetes Arm Aid

Novo Nordisk (NVO) Focuses on Pipeline Amid Competition

Featured Reports

Boeing 737 MAX Grounding Weighs on United Airlines (UAL)

With United Airlines having 14 Boeing 737 MAX jets in its fleet, the Zacks analyst is worried about the carrier's operations being hampered due to numerous flight cancellations from the grounding.

Vale Fertilizantes Buyout Aid Mosaic (MOS), High Debt Ail

While Mosaic's considerable debt load is a concern, the company should gain from significant synergies of the Vale Fertilizantes acquisition in 2019, according to the Zacks analyst.

Soft Carbohydrate Solutions Unit Hurts Archer Daniels (ADM)

Per Zacks analyst, Archer Daniels' soft Carbohydrate Solutions unit is hurting the top line. It expects the segment's results to be lower in third-quarter 2019, due to tough ethanol margin environment

Southern (SO) Aided by New Customers, Project Overruns Hurt

The Zacks analyst believes that Southern Company's success in increasing its customer base will underpin growth.

Vulcan (VMC) Rides on Aggregates Business, Weather Woes Stay

Per the Zacks analyst, Vulcan Materials is well poised given higher aggregates shipments backed by solid public construction activity.

Expansion Plans Aids Ormat (ORA), Operational Risks Hurt

Per the Zacks Analyst, Ormat bears a solid opportunity to expand in the global geothermal energy market.

Murphy Oil's (MUR) High Debt a Concern Amid Rising Output

Per the Zacks analyst, Murphy Oil's debt level, which is higher than S&P 500 average, is a concern. However, rising liquid production, due to its transformative initiatives will support performance.

New Upgrades

Acquisitions, Revenue Passenger Miles Aids TransDigm (TDG)

Per the Zacks analyst, TransDigm strengthens its position in proprietary aerospace components markets, via strategic acquisitions. Increased revenue passenger miles should also boost revenue growth.

Paylocity (PCTY) Rides on Growing Adoption of HCM Solutions

Per the Zacks analyst, Paylocity is gaining from solid uptake of its HCM solutions among clients with below 50 employees. Healthy momentum in the core and upper end of the market is also a boon.

Eni (E) to Gain from Mizton field Offshore Area 1 in Mexico

The Zacks analyst believes that the start-up of new upstream project Mizton field Offshore Area 1 in Mexico will likely support Eni's production growth guidance of 2-2.5% through 2019.

New Downgrades

Waning Wireline Legacy Voice & Data Services Hurt TELUS (TU)

Per the Zacks analyst, lower-than-expected revenues from legacy voice and data services on account of increased competitive intensity will likely impair TELUS' growth trajectory in the near future.

Forex Volatility, Escalating Expenses Hurt Euronet (EEFT)

Per the Zacks Analyst, its forex fluctuations in exchange rates of U.S. Dollar can be detrimental to the top-line. Moreover, rising operating expenses over the years weigh on the margins.

Escalating Capital Expenses, Competition Ails Lamar (LAMR)

Per the Zacks Analyst, rising capital expenditures related to the acquisition of outdoor advertising assets will likely reduce free cash flow for Lamar Advertising (LAMR) in the near term.

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Transdigm Group Incorporated (TDG) : Free Stock Analysis Report
Southern Company (The) (SO) : Free Stock Analysis Report
Novo Nordisk A/S (NVO) : Free Stock Analysis Report
Medtronic PLC (MDT) : Free Stock Analysis Report
Eni SpA (E) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
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