Tuesday, March 4, 2025

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 Novo Nordisk A/S (NVO), The Coca-Cola Co. (KO) and Wells Fargo & Co. (WFC), as well as a micro-cap stock Star Group, L.P. (SGU).  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 >>>

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You can read today's AWS here >>> Tariffs Front & Center in Today's Pre-Market: Futures Down

Today's Featured Research Reports

Shares of Novo Nordisk have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-37% vs. +3%). The company’s failure to meet the weight-loss target with CagriSema caused a huge setback. Intense rivalry in the obesity sector also threatens its market share. Patent expiry and pricing pressure across the diabetes market remain a woe.

Nevertheless, Novo Nordisk beat fourth-quarter earnings and sales estimates. Its 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. 

It has been tackling the supply constraints of Wegovy by making serious investments to ramp up production. It is now indicated in the United States and the EU to also reduce heart risks, which is a huge boost. Novo Nordisk is also pursuing other indications like liver fibrosis and MASH for semaglutide.

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

Coca-Cola’s shares have outperformed the Zacks Beverages - Soft drinks industry over the past year (+19.2% vs. +6.6%). The company experiences positive business trends, as evidenced by its strong track record of beating expectations. In fourth-quarter 2024, the company exceeded sales and earnings estimates for the eighth consecutive quarter, with earnings showing year-over-year improvement. 

Results benefited from continued business momentum, aided by higher pricing across markets facing intense inflation and favorable mix. Coca-Cola's all-weather strategy, combining marketing, innovation, and revenue growth management, supports its vision of a total beverage company and is expected to drive revenue growth in 2025. 

It has provided an optimistic view for 2025. However, Coca-Cola faces inflationary cost pressures due to higher commodity and material costs, as well as increased marketing investments.

(You can read the full research report on Coca-Cola here >>>)

Shares of Wells Fargo have outperformed the Zacks Financial - Investment Bank industry over the past six months (+42.2% vs. +25%). The company’s efforts to strengthen risk management and compliance infrastructure continue to be the mainstay of its operational strategy, as seen by the resolution of ten regulatory consent orders since 2019. 

Wells Fargo’s progress on efficiency initiatives, such as branch and footprint reduction, will support expense reduction and drive bottom-line growth. A decent deposit balance is likely to support its financials. 

Yet, its loan growth is expected to be limited, as the asset cap remains in place until it complies fully with regulators’ demands regarding operational risk management. This, along with lower origination, is expected to hurt mortgage banking income in the near term. Yet, its decent liquidity position will keep the capital distribution move sustainable in the long term.

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

Star Group’s shares have outperformed the Zacks Electronics - Miscellaneous Products industry over the past year (+26.6% vs. -44.2%). This microcap company with market capitalization of $451.79 million have seen first-quarter net income surged $19.9 million year over year to $32.9 million, driven by a $24.3 million favorable derivative movement, offsetting revenue declines and higher taxes. 

Adjusted EBITDA rose $2.8 million to $51.9 million, supported by acquisitions and margin expansion. Home heating oil and propane volumes grew 2.8% to 82.4 million gallons due to colder weather and acquisitions. Service and installation revenues rose 11.4% year over year to $88.6 million, enhancing stability. 

However, revenues fell 7.6% to $488.1 million as lower selling prices offset volume gains. The base business volume declined 4.7%, signaling organic weakness. Customer attrition hit 4.3%, with lower gross gains. Operating expenses rose 5.3% due to acquisitions, pressuring margins. Regulatory risks, pricing pressure and competition are challenging, while management remains cautious about distributions.

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

Other noteworthy reports we are featuring today include Moody's Corp. (MCO), Diamondback Energy, Inc. (FANG) and Waste Management, Inc. (WM).

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

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

Coca-Cola's (KO) All-Weather Strategy to Boost the Top Line

Rising Deposit, Lower Expenses Aid Wells Fargo (WFC) Growth

Featured Reports

Rebound in Bond Issuance Aid Moody's (MCO), Higher Costs Ail
Per the Zacks analyst, a solid revival of bond issuances, a dominant position in the credit rating industry and buyouts support Moody's. Yet, a steady rise in costs and stiff competition are concerns.

Diamondback (FANG) to Gain from Production Growth
The Zacks analyst believes that Diamondback Energy's technological advancements position it for sustainable production growth in the Permian Basin but is worried over increased capital expenditure.

WM Benefits From Focused Differentiation, Low Liquidity Ails
Per the Zacks analyst, differentiation through capitalization of extensive assets ensures long-term profitable growth for WM. Low liquidity remains a concern.

Cognizant (CTSH) Rides on Acquisitions, Strong Partner Base
Per the Zacks analyst, Cognizant is benefiting from accretive acquisitions. A strong partner base has been helping it to expand its clientele.

GE HealthCare (GEHC) To Gain from Rising Product Demand
Per the Zacks analyst, GE HealthCare's topline is likely to driven by rising demand for its products as it cater to growing markets. However, choppy macro environment to weigh on the stock.

Solid American Income Aids Globe Life (GL), Expenses Hurt
Per the Zacks analyst, Globe Life is set to grow on solid American Income distribution channel, which drives the premium income and underwriting margin. However, high costs remain a concern.

Solid Demand Aid Embraer (ERJ), Supply Chain Issue Woes
Per the Zacks Analyst, solid market demand for its E-Jet family is boosting Embraer's commercial aviation revenues. However, persistent supply chain constraint poses risk for the company.

New Upgrades

Solid Pipeline Activity, Deal Wins Benefit Guidewire (GWRE)
Per the Zacks analyst, nine deal wins by the Guidewire cloud platform coupled with increasing migration activities and a robust business pipeline is cushioning Guidewire's performance.

Jazz's (JAZZ) Oncology Drugs Fuel Sales & Diversification
While Jazz's sleep disorder portfolio has exhibited strong demand, the Zacks Analyst is impressed with the company's oncology drugs whose sales diversify the existing marketed portfolio.

Central Garden & Pet (CENT) Expands Through E-Commerce
Per the Zacks analyst, Central Garden & Pet is expanding through e-commerce growth, innovation, and cost efficiencies. The Cost and Simplicity program is streamlining operations.

New Downgrades

Inventory Destocking, Weaker Prices Ail FMC Corp (FMC)
Per the Zacks analyst, channel inventory destocking in Asia and Latin America will hurt the company's volumes. Weaker prices will also weigh on its margins.

Slow Private Construction to Hurt Martin Marietta (MLM)
Per the Zacks analyst, soft private construction market, higher input costs and macro uncertainty are concerns for Martin Marietta.

Weather Disruptions & Macro Woes Weigh on Beacon (BECN)
Per the Zacks analyst, Beacon's business is being hurt by weather woes and challenging macro-economic condition. Also, rising costs from expected tariffs, and labor shortages are added concerns.

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

Wells Fargo & Company (WFC) : Free Stock Analysis Report

CocaCola Company (The) (KO) : Free Stock Analysis Report

Moody's Corporation (MCO) : Free Stock Analysis Report

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

Waste Management, Inc. (WM) : Free Stock Analysis Report

Star Group, L.P. (SGU): Free Stock Analysis Report

Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research