Tuesday, October 29, 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 Apple Inc. (AAPL), Novo Nordisk A/S (NVO) and RTX Corp. (RTX), as well as a micro-cap stock FONAR Corp. (FONR). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 >>>

Shares of Apple have gained +21.7% over the year-to-date period against the Zacks Computer - Micro Computers industry’s gain of +22.4%. The company is benefiting from strong growth in Services revenues. It now has more than 1 billion paid subscribers across its Services portfolio, more than double what it had four years ago.

The expanding content portfolio of Apple TV+ and Apple Arcade helped in driving subscriber growth. Apple expects the September quarter’s (fourth-quarter fiscal 2024) revenues to grow at the same rate as of June quarter on a year-over-year basis. Unfavorable forex is expected to hurt revenues. For the Services segment, Apple expects a double-digit growth rate similar to the first three quarters of fiscal 2024.

Introduction of Apple Intelligence, an advanced personal intelligence system seamlessly integrated into iOS 18, iPadOS 18 and macOS Sequoia will help Apple shares to push higher. However, weakness in iPhone sales, particularly in China, is a concern.

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

Novo Nordisk’s shares have gained +9.2% over the year-to-date period against the Zacks Large Cap Pharmaceuticals industry’s gain of +19.7%. The company’s diabetes drugs Ozempic and Rybelsus and obesity drug Wegovy are performing well, fueled by increasing demand. Label expansions of the same in cardiovascular and other indications will likely boost sales.

Novo Nordisk has been tackling the supply constraints of Wegovy by making serious investments in increasing its manufacturing capabilities. It is now indicated in the United States and the EU to also reduce heart risks, which is a huge boost. The positive recommendation in the EU for approval of Wegovy for heart failure is also encouraging.

However, the CRL for insulin icodec in the United States is a setback for the company. Intense competition in the obesity sector also threatens Novo Nordisk’s market share. Patent expiry, pricing pressures across the diabetes market and the pipeline setbacks remain concerning. Estimates have declined ahead of third-quarter earnings results.

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

Shares of RTX have outperformed the Zacks Aerospace - Defense industry over the past year (+62.2% vs. +5.0%). The company ended Q3 2024 on a solid note, with both its earnings and sales having surpassed their respective Zacks Consensus Estimate. It continues to receive ample orders for its wide range of combat-proven defense products from the Pentagon and our foreign allies.

Improving commercial air traffic has been bolstering the company’s operating results. RTX holds a solid financial position, which enables it to make successful share repurchases. The company’s shares have outperformed its industry in the past year.

However, potentially rising crude prices tens to put cost pressures on airlines that may affect the operating results of commercial OEM producers like RTX. The company may also be affected if China enforces its announced sanctions against its missile and defense unit. Supply-chain challenges also pose a threat to RTX.

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

FONAR’s shares have gained +15.9% over the past year versus the Zacks Medical - Products industry’s gain of +33.8%. This microcap company, with a market capitalization of $97.4 million, demonstrated stable growth, with fiscal 2024 revenues up 4.3% to $102.9 million, driven by its subsidiary HMCA’s 4.6% growth in diagnostic imaging. Managing 42 MRI scanners, FONAR expands its market with a unique Upright MRI, enhancing diagnostic options.

Operational efficiency improved, with a 16.3% rise in net income to $14.1 million. A cash position of $56.3 million enables growth initiatives, while Upright MRI differentiates FONAR via unique scan capabilities. MRI scan volume grew 11%, reflecting strong demand, supported by tech upgrades like SwiftMR.

Yet, risks include vulnerability to reimbursement cuts, inflationary costs, competition from larger players, and reliance on the Upright MRI and regulatory pressures, particularly in core markets New York and Florida. Value-based care trends add further risk to its long-term stability.

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

Other noteworthy reports we are featuring today include ServiceNow, Inc. (NOW), Equinor ASA (EQNR) and IQVIA Holdings Inc. (IQV).

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

Robust Portfolio, Services Strength to Benefit Apple (AAPL)

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

Order Growth Continues to Aid RTX, Amid Jet Fuel Price Hike

Featured Reports

Equinor (EQNR) to Benefit From Expanding Renewables Capacity
Equinor's expansion in the renewables sector enhances sustainability alongside building new revenue streams for the company. However, its significant debt exposure concerns the Zacks analyst.

IQVIA Benefits From Global IT Infrastructure, Liquidity Low
Per the Zacks Analyst, IQVIA's strong healthcare-specific global IT infrastructure places it firmly in the life sciences space. Low liquidity remains a concern.

Solid Strategic Execution Aids IDEXX (IDXX), Cost Woes Worry
The Zacks Analyst is impressed with IDEXX's strong execution of strategy driving overseas growth, including new business gains and high instrument placements. Yet, macro woes are escalating costs.

New Order Growth & Lot Acquisitions Aid NVR, High Costs Ail
Per the Zacks analyst, NVR benefits from growth in new orders and higher settlements. Also, focus on solid lot acquisition strategy bodes well. However, high costs are a concern.

Continued Demand for Mass Capacity to Drive Seagate (STX)
Per the Zacks analyst, Seagate's performance is likely to gain from ongoing momentum in demand for mass-capacity storage solutions. However, increasing costs and high debt burden are concerning.

Focus on Buyouts to Continue Driving Conagra's (CAG) Sales
Per the Zacks analyst, Conagra is set to keep gaining from acquisitions. The company recently acquired FATTY Smoked Meat Sticks, enhancing its leading position in the high-growth meat stick category.

Solid Excess & Surplus Lines of Business Aids Kinsale (KNSL)
Per the Zacks analyst, Kinsale is set to grow on the excess and surplus lines of business. high retention rates arising from renewals and lower loss ratio. Yet, high costs and inflation dent margins.

New Upgrades

Growing Customer Base & Partnerships Aid ServiceNow (NOW)
Per the Zacks analyst, ServiceNow benefits from rising adoption of its workflows from companies undergoing digital transformation. Also, expanding partner base is a tailwind.

Nordstrom's (JWN) Strategic & Digital Efforts Seem Promising
Per the Zacks analyst, Nordstrom is progressing on key priorities of driving Nordstrom banner growth, optimizing operations and building momentum at the Rack. It is also focused on digital growth.

Diverse Investment Strategies Aid Artisan (APAM) AUM Growth
Per the Zacks Analyst, Artisan Partners' diverse product offerings and investment strategies is likely to help attract investors and increase assets under management, thus aiding top line expansion.

New Downgrades

Rising Jet Fuel Price, Labor Strike to Hurt Boeing (BA)
Per the Zacks analyst, increased jet fuel price can put cost pressure on airlines, which may reduce orders for new jets from Boeing. Recent labor strikes may hurt the company's operating results

Operational Inefficiencies & Competition to Ail Gentex (GNTX)
Per the Zacks analyst, Gentex's soaring SG&A and R&D costs are denting its operating margins and the trend is expected to continue. Competitive products by other companies also act as a headwind.

Lower Volumes, Elevated Costs Hurt Dover's (DOV) Performance
Per the Zacks analyst, lower business volumes will impact Dover's performance in the upcoming quarters. Elevated costs and supply-chain issues will continue to be headwinds.

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

Apple Inc. (AAPL) : Free Stock Analysis Report

Visa Inc. (V) : Free Stock Analysis Report

Novo Nordisk A/S (NVO) : Free Stock Analysis Report

ServiceNow, Inc. (NOW) : Free Stock Analysis Report

Fonar Corporation (FONR): Free Stock Analysis Report

IQVIA Holdings Inc. (IQV) : Free Stock Analysis Report

Equinor ASA (EQNR) : Free Stock Analysis Report

RTX Corporation (RTX) : Free Stock Analysis Report

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