Replies to post #214 on Great Stocks

[fung_derf]

Not saying I agree or disagree, but.....

Prologis Inc (PLD $128.14: Downgraded to In Line from Outperform)
Shuffling Some Ratings
Analyst Steve Sakwa
Price Target $44.00
While PLD has very modestly outpaced the RMZ since the start of the year, a number of other stocks have materially lagged the index since January 1st and therefore the stock’s lower relative ranking along with limited upside to estimates, in our view, has prompted us to downgrade the stock from Outperform to In-Line. While YTD performance is in line with the index, since the investor day on Dec 13th, where management highlighted the drivers for long term growth including the opportunities on data centers, the stock is up 7.2% while the REIT sector is up 3.4%. While industrial demand continues to normalize across the US post COVID along with slowing GDP growth, PLD’s occupancy rate stood at 96.8% so far in Q1 vs 97.1% in 4Q but we don’t see any major catalysts near term for the stock even though our recent channel checks suggest that large e-commerce players are back in the market taking space. For example, there’s been more dialogue with customers on larger spaces (> 500ksf) as overall activity on larger boxes has picked up especially in S CA including the Inland Empire although the timing of lease signings remains uncertain. In addition, we don’t expect the company’s push into the data center arena to yield much upside in ’24 as this new growth initiative is more likely to grow FFO growth higher in ’26 and beyond. While occupancy at PLD is likely to be the lowest in Q1 vs. its full year target of 97%, we continue to like the long-term prospects of the company and the industrial sector especially as we continue to see the supply pipeline shrink. On the plus side, we expect PLD to deliver high single digit NOI growth and ~11% FFO/sh growth (ex-promotes) over the next several years similar to what was mentioned at the investor day given the significant mark to market opportunities that exist in the portfolio even with our assumption of market rent growth of -5% and -1% in ’24 and ’25, respectively. With that said, PLD is trading at 27x our projected ’24 AFFO estimate and roughly 23x our ’25 AFFO estimate so it’s hard to argue for further multiple expansion off the current levels and therefore meaningful upside in the stock price would need to come from upward estimate revisions.

[fung_derf]

Looks like SMCI has found its current fair market price....

Supermicro Announces Pricing of Public Offering of Common Stock
March 19, 2024 11:44 PM Eastern Daylight Time
SAN JOSE, Calif.--(BUSINESS WIRE)--Super Micro Computer, Inc. (“Supermicro” or the “Company”) (Nasdaq: SMCI) , today announced the pricing of its previously announced underwritten public offering of 2,000,000 shares of its common stock at a public offering price of $875.00 per share. Additionally, the Company has granted the underwriter a 30-day option to purchase up to an additional 300,000 shares of common stock at the public offering price, less underwriting discounts and commissions. The gross proceeds to Supermicro are expected to be $1.75 billion before deducting underwriting discounts, commissions and estimated offering expenses, and assuming no exercise of the underwriter’s option to purchase additional shares. The offering is expected to close on or about March 22, 2024, subject to customary closing conditions.

The Company currently intends to use the proceeds from the offering to support its operations, including for purchase of inventory and other working capital needs, manufacturing capacity expansion and increased R&D investments.

Goldman Sachs & Co. LLC is acting as sole underwriter and sole book-running manager for the offering.

The offering is being made pursuant to an effective registration statement on Form S-3 that was filed with the Securities and Exchange Commission (the “SEC”) on March 19, 2024. A final prospectus relating to the offering will be filed with the SEC and may be obtained, when available, by contacting Goldman Sachs & Co. LLC, 200 West Street, New York, NY 10282, Attention: Prospectus Department, by telephone at [phone] or by emailing [e-mail].

[fung_derf]

Surprised you aren't talking about $NVO more

[gfp927z]

>>> Will Novo Nordisk Overtake Eli Lilly as the Most Valuable Healthcare Stock?


David Jagielski

Motley Fool

March 20, 2024


https://finance.yahoo.com/news/novo-nordisk-overtake-eli-lilly-123000972.html


Novo Nordisk (NYSE: NVO) and Eli Lilly (NYSE: LLY) are the top two healthcare stocks in the world based on market cap. Their diabetes and weight loss medications are a big reason these have been among the best healthcare investments to own over the past few years. Today, Eli Lilly is the larger of the two companies, with a market cap of more than $700 billion. Novo Nordisk, however, isn't too far behind, sporting a valuation about $600 billion. And there are some recent catalysts that suggest that gap could shrink in the future.

Why Novo Nordisk could soar higher this year

Novo Nordisk stock is up 28% so far in 2024, and there are a couple of reasons it may become an even hotter in the weeks and months ahead.

On March 8, the Food and Drug Administration approved Novo Nordisk's weight loss treatment, Wegovy, for a new indication: reducing cardiovascular risk in obese or overweight adults. Up until then, the drug was only approved as a treatment for weight loss. The label expansion gives patients another reason to use the drug, which could result in more prescriptions and insurance coverage -- and thus, more revenue.

Novo Nordisk has also been working on a weight loss pill (Wegovy is an injectable) that has been demonstrating encouraging results in clinical trials, showing that it can achieve faster weight loss than Wegovy: 13% after 12 weeks versus just 6% with the injectable treatment. It was an early-stage trial but the data is promising nonetheless.

In 2023, Novo Nordisk's sales increased by 36% (when excluding the impact of foreign exchange) to 232.3 billion Danish kroner ($34.8 billion). Wegovy's sales of 31.3 billion Danish kroner soared by a staggering 420%. And with much more potential on the horizon with a new indication for Wegovy and it entering new markets, Novo Nordisk is nowhere near done growing. Having a weight loss pill in development that could be even better than Wegovy gives investors even more reason to stay bullish on the stock for the long haul.

Could Eli Lilly's stock struggle?

Novo Nordisk is more of a pure-play weight loss and diabetes investment, whereas Eli Lilly's business is much more diversified. And that diversification is one of the reasons the healthcare stock may stumble a bit this year. Recently, regulators delayed making a decision on Eli Lilly's Alzheimer's treatment, donanemab. While it's likely to still obtain approval, the stock fell on the news.

In addition to diabetes treatments, Eli Lilly's top five treatments for the last three months of 2023 featured a breast cancer drug (Verzenio) and psoriasis medication (Taltz). While weight loss is a big growth opportunity for Eli Lilly, with recently approved Zepbound just starting to generate revenue for the business, its operations are certainly broader than Novo Nordisk's.

Another reason the healthcare stock could face pressure this year is that it trades at a lofty 60 times forward earnings, which is based on analyst expectations of where its profits will be in the next year. By comparison, Novo Nordisk trades at a multiple of 39. With a much higher premium, there's more pressure for Eli Lilly to deliver on not just its weight loss and diabetes treatments but on its other drugs as well.

Will Novo Nordisk become the more valuable healthcare stock?

Over the past month, shares of Eli Lilly have fallen by about 3% while Novo Nordisk stock has risen by close to 7%. The gap is shrinking between these two companies and there's a possibility it narrows even more narrow later this year, depending on how these businesses perform.

I don't, however, expect Novo Nordisk to become the more valuable company. Eli Lilly is simply too strong, and with Zepbound in its very early innings of generating revenue and the approval of donanemab still a strong possibility, the recent pullback in price may only prove to be temporary.

Overall, these are two solid healthcare stocks and whichever you decide to invest in may ultimately depend on whether you prefer to focus on the broader and pricier business (Eli Lilly) or a slightly cheaper company whose priorities center around diabetes and weight loss (Novo Nordisk). But with stellar results and exciting futures ahead, both of these stocks can be great buys.

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