Company Overview - Arcellx, Inc. (ACLX) is part of the Medical group, which consists of 932 companies and currently ranks 8 within the Zacks Sector Rank [2] - The company belongs to the Medical - Biomedical and Genetics industry, which includes 453 companies and is ranked 93 in the Zacks Industry Rank [6] Performance Metrics - Year-to-date, Arcellx, Inc. has returned approximately 10.7%, outperforming the average gain of 6% for Medical stocks [4] - The Zacks Consensus Estimate for ACLX's full-year earnings has increased by 1.2% over the past quarter, indicating improved analyst sentiment [4] Comparison with Peers - Bayer Aktiengesellschaft (BAYRY), another Medical stock, has outperformed the sector with a year-to-date return of 15.6% and a Zacks Rank of 1 (Strong Buy) [5] - The Large Cap Pharmaceuticals industry, which includes Bayer, has gained 19.8% since the beginning of the year, while Arcellx, Inc. is slightly underperforming its industry group [6][7]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Johnson & Johnson (JNJ) due to higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Johnson & Johnson is expected to report quarterly earnings of $2.50 per share, reflecting a year-over-year increase of +22.6% [3][19]. - Revenues are projected to be $24.12 billion, which is a 7.1% increase from the same quarter last year [3][19]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.36% over the last 30 days, indicating a reassessment by analysts [4][19]. - The Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.80%, suggesting a bearish outlook from analysts [12][19]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict deviations from consensus estimates, but its predictive power is stronger for positive readings [9][10]. - Johnson & Johnson's current Zacks Rank is 3 (Hold), which complicates predictions of an earnings beat [12][20]. Historical Performance - In the last reported quarter, Johnson & Johnson exceeded the expected earnings of $2.77 per share by delivering $2.80, resulting in a surprise of +1.08% [13]. - The company has beaten consensus EPS estimates in each of the last four quarters [14][20]. Conclusion - Despite the potential for an earnings beat, various factors may influence stock movement, and the current indicators suggest that Johnson & Johnson may not be a compelling candidate for an earnings surprise [15][17].

Company Performance - Johnson & Johnson (JNJ) closed at $209.72, with a daily increase of +2.61%, outperforming the S&P 500's gain of 0.16% [1] - Prior to this trading day, JNJ shares had decreased by 3.4%, underperforming the Medical sector's gain of 2.84% and the S&P 500's gain of 1.89% [1] Upcoming Earnings - The upcoming earnings report is expected on January 21, 2026, with an anticipated EPS of $2.52, reflecting a 23.53% increase year-over-year [2] - Revenue is projected to be $24.11 billion, indicating a 7.06% increase compared to the same quarter of the previous year [2] Full Year Projections - For the full year, earnings are projected at $10.86 per share, representing an increase of +8.82%, while revenue is expected to remain flat at $93.7 billion [3] Analyst Forecasts - Recent revisions to analyst forecasts are crucial, as upward revisions indicate positive sentiment regarding the company's business operations and profit generation capabilities [4] - Adjustments in estimates are linked to stock price performance, suggesting that investors can benefit from tracking these changes [5] Zacks Rank and Valuation - Johnson & Johnson currently holds a Zacks Rank of 3 (Hold), with a Forward P/E ratio of 17.8, which is higher than the industry's Forward P/E of 15.26 [6] - The company has a PEG ratio of 2.1, compared to the Large Cap Pharmaceuticals industry's average PEG ratio of 1.59 [7] Industry Context - The Large Cap Pharmaceuticals industry, part of the Medical sector, has a Zacks Industry Rank of 185, placing it in the bottom 25% of over 250 industries [7][8] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Core Viewpoint - Merck is experiencing positive stock performance, with a notable increase in share price and projected earnings growth, indicating strong investor interest and optimism in the company's future performance [1][2][3]. Group 1: Stock Performance - Merck's stock closed at $110.99, reflecting a 2.2% increase from the previous trading session, outperforming the S&P 500's gain of 0.01% [1]. - Over the prior period, Merck's shares have risen by 11.25%, significantly exceeding the Medical sector's gain of 2.01% and the S&P 500's gain of 0.86% [1]. Group 2: Earnings Projections - Merck is expected to report earnings of $2.08 per share on February 3, 2026, representing a year-over-year growth of 20.93% [2]. - The consensus estimate for revenue is projected at $16.18 billion, indicating a 3.56% increase from the same quarter last year [2]. Group 3: Annual Forecasts - For the entire year, Zacks Consensus Estimates forecast earnings of $8.98 per share and revenue of $64.81 billion, reflecting changes of +17.39% and 0%, respectively, compared to the previous year [3]. - Recent adjustments to analyst estimates for Merck indicate a dynamic business environment, with positive revisions suggesting analyst optimism regarding profitability [3]. Group 4: Valuation Metrics - Merck's Forward P/E ratio stands at 12.97, which is below the industry average Forward P/E of 15.6, indicating a potential valuation discount [6]. - The PEG ratio for Merck is currently 1.11, compared to the Large Cap Pharmaceuticals industry average of 1.59, suggesting a favorable growth outlook relative to its price [6]. Group 5: Industry Context - The Large Cap Pharmaceuticals industry, part of the Medical sector, holds a Zacks Industry Rank of 168, placing it in the bottom 32% of over 250 industries [7]. - The Zacks Industry Rank assesses the performance of industry groups, with top-rated industries historically outperforming lower-rated ones by a factor of 2 to 1 [7].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Eli Lilly (LLY) - Eli Lilly currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance [2][3] - The stock has shown a price increase of 0.24% over the past week, while the Zacks Large Cap Pharmaceuticals industry has decreased by 0.13% during the same period [5] - Over the last quarter, Eli Lilly's shares have increased by 27.11%, and over the past year, they have gained 36.13%, significantly outperforming the S&P 500, which moved 3.09% and 17.53% respectively [6] Trading Volume and Market Activity - Eli Lilly's average 20-day trading volume is 2,659,607 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, 3 earnings estimates for Eli Lilly have been revised upwards, while 2 have been revised downwards, leading to an increase in the consensus estimate from $23.60 to $23.78 [9] - For the next fiscal year, 8 estimates have moved upwards with no downward revisions, indicating positive sentiment regarding future earnings [9] Conclusion - Given the strong performance metrics and positive earnings outlook, Eli Lilly is positioned as a solid momentum pick and should be considered for investment [11]

Company Performance - Merck (MRK) closed at $106.45, reflecting a +1.34% change from the previous day, outperforming the S&P 500's gain of 0.32% [1] - The stock has decreased by 0.59% over the past month, underperforming the Medical sector's increase of 1.67% and the S&P 500's rise of 4.7% [1] Upcoming Earnings - Merck's upcoming EPS is projected at $2.08, indicating a 20.93% increase compared to the same quarter last year [2] - Revenue is expected to reach $16.18 billion, representing a 3.56% increase from the year-ago quarter [2] Full Year Projections - For the full year, earnings are projected at $8.98 per share and revenue at $64.81 billion, reflecting increases of +17.39% and +1% respectively from the prior year [3] - Recent analyst estimate revisions suggest positive sentiment towards Merck's business operations and profit generation capabilities [3] Valuation Metrics - Merck's Forward P/E ratio stands at 11.7, which is below the industry average of 14.45, indicating a discount relative to its peers [6] - The company has a PEG ratio of 1, compared to the Large Cap Pharmaceuticals industry's average PEG ratio of 1.64 [7] Industry Context - The Large Cap Pharmaceuticals industry, part of the Medical sector, has a Zacks Industry Rank of 161, placing it in the bottom 35% of over 250 industries [8] - The Zacks Industry Rank measures the strength of industry groups based on the average Zacks Rank of individual stocks, with higher-ranked industries outperforming lower-ranked ones [8]

Industry Overview - The drug and biotech sector has shown recovery after a weak first half, with large drugmakers signing pricing agreements with the Trump administration [1] - Dealmaking activity surged in the second half, boosting investor confidence, with the Large Cap Pharmaceuticals industry outperforming the S&P 500 in the past three months [1][4] - Innovation is at its peak, particularly in areas like obesity, cell and gene therapy, and next-gen oncology treatments, attracting investor attention [2] - Despite headwinds such as pipeline setbacks and regulatory risks, the outlook for growth in 2026 remains favorable due to rapid innovation and increased use of AI in drug development [2] Eli Lilly - Eli Lilly has achieved significant success with its tirzepatide medicines, including diabetes drug Mounjaro and weight loss medicine Zepbound, which are key revenue drivers [6][7] - Strong sales growth in 2025 is attributed to international market launches and improved production, with continued demand expected in 2026 [7] - Lilly is investing in obesity treatments with new molecules in clinical development, including orforglipron and retatrutide, with regulatory applications filed for orforglipron [8][9] - Despite challenges like declining product prices and competition in the GLP-1 market, Lilly's stock has risen 39.3% year to date, with 2026 earnings estimates improving from $30.78 to $33.61 per share [10] Johnson & Johnson - J&J has shown strong operational performance in 2025, with double-digit revenue growth from key brands despite the loss of exclusivity for Stelara [11] - The Innovative Medicine segment is expected to accelerate growth in 2026, driven by key products and new launches [12] - J&J's MedTech business has improved, with growth driven by acquired cardiovascular businesses and new product launches expected to contribute to 2026 growth [13][14] - The company has advanced its pipeline significantly and is on an acquisition spree, with a Zacks Rank of 2 (Buy) and a stock rise of 43.3% year to date [17] AbbVie - AbbVie faces declining sales from Humira due to loss of exclusivity but has successfully launched new immunology medicines Skyrizi and Rinvoq, generating combined sales of $18.5 billion in the first nine months of 2025 [18][19] - Strong market growth and new indications for these drugs are expected to drive future growth, alongside contributions from newer drugs [20] - AbbVie anticipates a high single-digit CAGR through 2029, supported by robust performance from Skyrizi and Rinvoq, with a Zacks Rank of 3 and a stock rise of 28.2% year to date [21][22] Amgen - Amgen's revenue growth is driven by key medicines like Repatha and new biosimilars, compensating for declines from mature drugs [23][24] - The company is focusing on obesity treatments with its candidate MariTide, which differentiates itself with a convenient dosing method [24] - Amgen's stock has risen 27.3% year to date, with 2026 earnings estimates increasing from $21.43 to $21.62 per share [25] AstraZeneca - AstraZeneca has several blockbuster drugs exceeding $1 billion in sales, with newer products contributing to growth despite losses from mature brands [26][27] - The company expects to achieve industry-leading top-line growth through 2030, with plans to launch 20 new medicines and generate $80 billion in total revenues [28] - AstraZeneca faces challenges such as competition and regulatory impacts but maintains a stable earnings estimate of $5.15 per share for 2026, with a stock rise of 10.7% year to date [29][30]

Industry Overview - The drug and biotech sector has shown recovery after a weak first half, with large drugmakers like Pfizer, AstraZeneca, Eli Lilly, and Novo Nordisk signing drug pricing agreements with the Trump administration [1] - A rebound in mergers and acquisitions (M&A) has increased investor confidence, with the Large Cap Pharmaceuticals industry outperforming the S&P 500 index over the past three months [1] - Innovation is at its peak, particularly in areas such as obesity, gene therapy, inflammation, and neuroscience, with the FDA approving 41 drugs as of December 15, 2025 [2] Biotech Breakthrough Stocks - Five biotech stocks are highlighted for potential investment: Mind Medicine (MindMed), Ocugen, Keros Therapeutics, Kyverna Therapeutics, and Celcuity, which have shown promising clinical results or have significant upcoming FDA decisions [3][4] - All highlighted stocks have outperformed the industry's increase of 15.3% in the past three months [6] Mind Medicine (MindMed) - MindMed is developing MM120, an orally disintegrating tablet for generalized anxiety disorder (GAD) and major depressive disorder (MDD), with pivotal phase III studies currently enrolling [10] - The FDA has granted breakthrough therapy designation to MM120 for GAD, with top-line data from the Voyage study expected in the first half of 2026 [11] - MindMed's recent financing of $258.9 million strengthens its balance sheet, allowing for accelerated development of MM120 [13] Ocugen - Ocugen is advancing gene therapy programs for retinal diseases, with a phase III study on OCU400 for retinitis pigmentosa (RP) nearing completion and top-line data expected in Q4 2026 [15] - The company plans to file a biologics license application (BLA) for OCU400 in 2026, with a rolling BLA submission starting in the first half of 2026 [15] - Ocugen is also developing OCU410 for geographic atrophy (GA), with data from the phase II study expected in Q1 2026 [18] Keros Therapeutics - Keros plans to initiate a phase II study of KER-065 for Duchenne muscular dystrophy (DMD) in Q1 2026, having received orphan drug designation from the FDA [20] - The company has shifted focus from cibotercept to KER-065, which has shown promising results in earlier studies [20] - Keros has a partnership with Takeda, which is expected to generate near-term revenues through milestone payments and royalties [21] Kyverna Therapeutics - Kyverna's lead CAR T-cell therapy candidate, mivocabtagene autoleucel (miv-cel), is in a pivotal phase II study for stiff person syndrome (SPS), with top-line data showing significant improvements in patient outcomes [22][23] - The company plans to file a BLA for miv-cel in the first half of 2026 [23] - Kyverna is also evaluating miv-cel in generalized myasthenia gravis and has secured a loan facility of up to $150 million to support its pipeline [25] Celcuity - Celcuity has submitted a new drug application for gedatolisib for HR+, HER2- advanced breast cancer, with FDA decision expected in 2026 [26] - Top-line data from the VIKTORIA-1 study showed significant improvements in median progression-free survival compared to existing treatments [27] - Enrollment is complete for the PIK3CA mutant cohort of the study, with data expected in the first half of 2026 [28]

Core Insights - The article highlights the performance and outlook of several stocks, including Microsoft, Novartis, RTX, and Air T, as analyzed by Zacks Equity Research [1][2]. Microsoft - Microsoft's shares have outperformed the Zacks Computer - Software industry over the past year, with a growth of 6.8% compared to the industry's 2.3% [4]. - The company holds a 25% market share in the cloud sector through Azure and integrates AI strategically via OpenAI, generating over $100 billion in annual operating cash flows with margins exceeding 40% [4]. - Fiscal 2026 net sales are expected to grow by 15.1% from fiscal 2025, but the company faces competition from AWS and Google Cloud, regulatory scrutiny, and rising capital expenditures for AI infrastructure [5]. Novartis - Novartis has outperformed the Zacks Large Cap Pharmaceuticals industry over the past year, with a growth of 38.8% compared to 14.9% for the industry [6]. - The company has a diverse portfolio, including drugs like Kisqali and Pluvicto, with projected compound annual growth rates (CAGR) of 37.9% and 43.3% over the next three years [7]. - New drug approvals and label expansions are expected to mitigate the impact of generic competition for key drugs, supported by recent acquisitions and collaborations [8]. RTX - RTX's shares have outperformed the Zacks Aerospace - Defense industry over the past year, with a growth of 54.1% compared to 28.1% for the industry [9]. - The company has a backlog of $251 billion as of September 30, 2025, driven by strong demand for defense products and improving global commercial air traffic [10]. - However, uncertainties from U.S. government import tariffs and ongoing supply-chain challenges pose risks to RTX's performance [11]. Air T - Air T has outperformed the Zacks Transportation - Air Freight and Cargo industry over the past year, with a growth of 0.8% compared to a decline of 8.4% for the industry [12]. - The company shows operational strength with margin expansion in Commercial Aircraft & Engines and stable cash flow from FedEx feeder operations [12]. - Elevated leverage, rising interest costs, and execution risks across segments constrain earnings durability, with liquidity pressured by volatile working-capital needs [13].

Core Insights - Novo Nordisk's stock closed at $50.29, reflecting a daily increase of 2.53%, outperforming the S&P 500's gain of 0.21% [1] - Over the past month, shares have decreased by 2.41%, underperforming both the Medical sector's increase of 3.7% and the S&P 500's gain of 0.89% [1] Earnings Projections - The upcoming earnings release is expected to show earnings of $0.9 per share, indicating a year-over-year decline of 1.1% [2] - Revenue is projected at $12.11 billion, representing a 1.19% decrease from the same quarter last year [2] Full Year Estimates - For the full year, analysts expect earnings of $3.57 per share and revenue of $47.87 billion, marking increases of 8.84% and 13.72% respectively from the previous year [3] - Recent changes in analyst estimates suggest a positive outlook on business and profitability [3] Zacks Rank and Performance - The Zacks Rank system, which assesses stock performance based on estimate changes, currently ranks Novo Nordisk at 5 (Strong Sell) [5] - The Zacks Consensus EPS estimate has decreased by 0.22% in the past month [5] Valuation Metrics - Novo Nordisk has a Forward P/E ratio of 13.74, which aligns with the industry average [6] - The Large Cap Pharmaceuticals industry, part of the Medical sector, holds a Zacks Industry Rank of 183, placing it in the bottom 26% of over 250 industries [6] Industry Insights - The Zacks Industry Rank evaluates the strength of industry groups based on the average Zacks Rank of individual stocks, with top-rated industries outperforming lower-rated ones by a factor of 2 to 1 [7]