Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the "long context," investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Even ...

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]

Key Takeaways Five biotech stocks are highlighted for 2026 due to late-stage trials or upcoming FDA decisions.MindMed expects multiple phase III data readouts in 2026 for its lead program MM120.Ocugen, Kyverna and Celcuity face key inflection points tied to BLAs or pivotal clinical data.After a weak first half, the drug and biotech sector has recovered in the past 2-3 months with large drugmakers like Pfizer, AstraZeneca, Eli Lilly and Novo Nordisk signing drug pricing agreements with the Trump administrati ...

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].

Novo Nordisk (NVO) closed the most recent trading day at $50.29, moving +2.53% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.21%. Elsewhere, the Dow gained 1.35%, while the tech-heavy Nasdaq lost 0.26%. Shares of the drugmaker have depreciated by 2.41% over the course of the past month, underperforming the Medical sector's gain of 3.7%, and the S&P 500's gain of 0.89%.The upcoming earnings release of Novo Nordisk will be of great interest to investors. On that day, Novo ...

Core Insights - The drug and biotech sector has shown signs of recovery after a muted performance earlier in the year, driven by drug pricing agreements with the Trump administration [1][2] - Despite facing challenges such as pipeline setbacks and regulatory risks, the industry's focus on innovation and M&A activity suggests a favorable long-term outlook [2][7] - Eli Lilly, Johnson & Johnson, and Sanofi are highlighted as strong candidates for investment [3] Industry Overview - The Zacks Large Cap Pharmaceuticals industry includes major global companies developing multi-million-dollar drugs across various therapeutic areas, emphasizing continuous innovation and significant R&D investment [4][5] - The industry is characterized by aggressive M&A activities, with large companies acquiring smaller biotech firms to enhance their pipelines [7][8] Innovation and Pipeline - Innovation is crucial for growth, with companies investing heavily in R&D and integrating new technologies like AI and gene editing to improve drug discovery [5][6] - Key therapeutic areas attracting investment include rare diseases, oncology, obesity, and immunology [6] M&A Activity - The sector has seen a rebound in M&A activity, particularly in fast-growing markets such as oncology and rare diseases, with companies like Pfizer and Roche making significant deals [9][10] Challenges and Headwinds - The industry faces challenges including pipeline setbacks, pricing pressures, and regulatory scrutiny, which can impact share prices [10][11] - Macroeconomic uncertainties and potential tariffs on pharmaceutical imports add to the industry's challenges [11][12] Performance Metrics - The Zacks Large Cap Pharmaceuticals industry currently ranks 185, placing it in the bottom 24% of Zacks industries, indicating a dull outlook compared to the broader market [13][14] - Year-to-date, the industry has risen 15.6%, outperforming the Zacks Medical Sector but underperforming the S&P 500 [15] Valuation - The industry is trading at a forward P/E of 16.91X, lower than the S&P 500's 23.44X, suggesting potential undervaluation [18] Company Highlights - **Eli Lilly**: Strong sales growth driven by diabetes and obesity drugs Mounjaro and Zepbound, with plans for new product launches and pipeline expansion [21][22][24] - **Johnson & Johnson**: Growth in its Innovative Medicine unit despite challenges, with a focus on new drug launches and acquisitions to strengthen its pipeline [27][29][30] - **Sanofi**: Strong demand for its immunology drug Dupixent and a solid vaccine portfolio, although facing challenges from generic competition and pipeline setbacks [34][35]

Market Overview - The current bull market, which began in October 2022, has seen significant growth in technology companies, primarily driven by the artificial intelligence theme [1] - A notable rotation in sector strength is expected as the market progresses into 2026, with health care emerging as a leading sector [2][3] Health Care Sector Performance - Health care is projected to outperform other sectors, supported by resilient demand, technological innovation, and favorable policy conditions [3] - Recent performance data shows the S&P 500 Health Care sector leading with an 8.50% increase over the past month, significantly outperforming other sectors [5] AI Impact on Health Care - The integration of AI in health care is revolutionizing diagnostics and treatment, leading to more personalized care and improved patient outcomes [6] - AI applications in health care include early disease detection and predictive analytics for patient outcomes [6] Structural Tailwinds for Health Care - The health care sector benefits from structural tailwinds that go beyond cyclical recovery, including tariff exemptions for pharmaceuticals that protect supply chains [7] - The defensive nature of health care combined with growth potential positions it favorably for future performance [7] Large-Cap Pharmaceuticals - The Zacks Large Cap Pharmaceuticals industry is currently ranked in the top 37% of approximately 250 industry groups, indicating strong relative strength [9] - Large-cap pharmaceutical companies, particularly those leveraging AI, are expected to drive health care's outperformance in 2026 [11] Eli Lilly's Position - Eli Lilly is highlighted as a leading player in the large-cap pharmaceutical space, with a strong product pipeline and significant growth potential in therapeutic areas like diabetes and oncology [13] - The company has secured a deal with Medicare for its weight loss drug, Zepbound, which is expected to expand its market significantly [14] - Eli Lilly's partnerships with AI firms, including a $1.3 billion alliance with Superluminal Medicines, are set to enhance its drug discovery capabilities [16][17] Earnings Projections - Analysts have raised earnings estimates for Eli Lilly by 9.28% over the past 60 days, projecting a 40.9% growth rate in EPS for 2026 [19] - Revenue for Eli Lilly is anticipated to increase by 23.3% to $78.84 billion, reflecting strong growth prospects for the company [19] Conclusion - The health care sector is positioned for robust returns in 2026, with large-cap pharmaceuticals at the forefront, driven by AI innovations and favorable market conditions [23]

Core Insights - The article highlights the performance and outlook of several key stocks, including JPMorgan Chase, Netflix, AbbVie, and Ohio Valley Banc Corp, as discussed in the Zacks Analyst Blog [1][2]. Group 1: JPMorgan Chase & Co. (JPM) - JPMorgan Chase shares have increased by 27.2% year-to-date, compared to a 29.6% gain in the Zacks Financial - Investment Bank industry [4]. - The company's net interest income (NII) is projected to grow at a CAGR of 3.3% by 2027, supported by business expansion and loan demand [5]. - Non-interest income is expected to decline due to elevated costs from technology and marketing investments, with expenses anticipated to grow at a CAGR of 4.4% by 2027 [6]. Group 2: Netflix, Inc. (NFLX) - Netflix shares have outperformed the Zacks Broadcast Radio and Television industry, gaining 18.9% compared to a decline of 59.6% in the industry [7]. - The advertising tier now represents over 55% of new sign-ups, and the company aims to double its revenues by 2030, targeting a $1 trillion market capitalization [8]. - For the fourth quarter, Netflix forecasts $11.96 billion in revenue, reflecting a 16.7% growth and a 23.9% operating margin, driven by major releases [9]. Group 3: AbbVie Inc. (ABBV) - AbbVie shares have risen by 34.9% year-to-date, outperforming the Zacks Large Cap Pharmaceuticals industry, which gained 17.9% [10]. - The company has successfully launched new immunology medicines, Skyrizi and Rinvoq, to offset the impact of Humira's loss of exclusivity [10]. - AbbVie is expected to return to robust revenue growth in 2025, despite facing challenges from competitive pressures and macroeconomic factors [11]. Group 4: Ohio Valley Banc Corp. (OVBC) - Ohio Valley Banc shares have surged by 62.5% year-to-date, significantly outperforming the Zacks Banks - Midwest industry, which saw a decline of 1.3% [12]. - The company is enhancing its net interest margin (NIM) by focusing on higher-yielding loans and maintaining low-cost deposits [12]. - Despite strong earnings from targeted loan growth, rising provisioning needs and macro sensitivity pose risks to future performance [13].

Core Insights - The article discusses the performance and outlook of three companies: Accenture plc, Sanofi, and Dell Technologies Inc. Accenture plc - Accenture's shares have underperformed the Zacks Computers - IT Services industry over the past year, declining by 31.2% compared to the industry's 18.7% decline [4] - The company faces rising competition, leading to increased talent costs and pricing pressures, along with integration risks from rapid acquisitions [4] - Despite these challenges, Accenture's growth strategy focuses on delivering comprehensive value to stakeholders, capitalizing on strong demand for application modernization, cloud enhancements, and cybersecurity [5] - The company has leveraged buyouts to enhance its digital technology capabilities and maintains a strong cash position, making it appealing for dividend-seeking investors [6] Sanofi - Sanofi's shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year, with a growth of 2.2% compared to the industry's 0.8% [7] - The company exceeded third-quarter earnings and sales estimates, driven by strong demand for Dupixent across various indications and regions [7] - Sanofi has launched several new drugs that significantly contribute to its accelerated top-line growth and has increased R&D investments to advance its pipeline [8] - However, the company faces challenges from generic erosion of Aubagio, lower sales from mature products, competitive pressure on influenza vaccines, and uncertainties related to potential U.S. tariffs on EU exports [9] Dell Technologies Inc. - Dell Technologies has outperformed the Zacks Computer - Micro Computers industry year-to-date, with a growth of 25.2% compared to the industry's 8% [11] - The company benefits from strong demand for AI servers, securing $8.2 billion in AI server orders, which has built a robust backlog [11] - Dell's partnerships with major companies like NVIDIA, Google, and Microsoft have been significant growth drivers [11] - Nonetheless, Dell faces challenges from weaker demand for traditional servers, declining consumer PC revenue, and competitive pressures in the AI market [12]