The latest Market Talks covering the Health Care sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0736 GMT - German healthcare group Fresenius is raising full-year earnings guidance as profitability from the growth drivers of its Kabi pharmaceutical unit is heading higher, Jefferies analysts say in a research note. Fresenius's Kabi business achieved a 17% adjusted operating profit margin in the second quarter, with profitability at the unit's growth vectors entering the 17%-19% margin band for the first time, the analysts say. Fresenius said Kabi's growth vectors--biopharma, nutrition and medical technology--delivered a margin of 17.9% in the quarter. Moreover, the approval of Germany's healthcare reform ends regulatory uncertainty on the group's Helios hospital segment, the analysts say. Shares rise 5.6%. (adria.calatayud@wsj.com)
0730 GMT - European stock indexes rise at the open, extending a raft of record highs. Industrial and retail stocks jump as the Europe-wide Stoxx 600 rises 0.5% to 659.75 points, a new record. London's FTSE 100 jumps 0.6% as metals miners rise, with silver miner Fresnillo adding 5.3%. Industrials boost Germany's DAX 0.7% higher, with Rheinmetall adding 1.3% while Siemens Energy jumps 4.4% after earnings. The French CAC 40 rises 0.2% even as luxuries weaken, with LVMH down 1.4%. Carrefour adds 1.6%, while Legrand rises 1.3%. In Amsterdam, the AEX edges up 0.2%, led by a 2.6% jump for Heineken. Italy's FTSE MIB adds 0.5%, while the IBEX 35 gains 0.5%. In Copenhagen, Novo Nordisk drops 4.4% after earnings. (josephmichael.stonor@wsj.com)
0729 GMT - Sandoz Group benefited from a strong U.S. performance and from fast growth in sales of biosimilar drugs in the first half, which is also boosting its profitability, says Vontobel's Stefan Schneider in a research note. While overall sales and profitability for the Swiss maker of generic drugs were in line with consensus expectations, its sales growth in the U.S. and the biosimilar segment beat both consensus and Vontobel's estimates, the analyst says. "This is also remarkable, as the U.S. and biosimilars were highlighted as the center for value creation when Sandoz was spun off in 2023," Schneider says. Since biosimilars carry a higher profit margin than generics, strong biosimilar sales helped Sandoz's first-half core Ebitda margin, he adds. Shares are up 7.7%. (adria.calatayud@wsj.com)
0700 GMT - Novo Nordisk shares are expected to come under pressure in Europe this morning, but to a lesser degree than the 6% drop in U.S. trading yesterday, Jyske Bank's Henrik Hallengreen Laustsen writes. The company significantly beat estimates in the second quarter and raised its outlook more than expected. Sales and earnings were both above expectations in the quarter, driven by Ozempic, while the Wegovy pill performed largely as forecast. Consensus estimates might be increased by approximately 3% if expectations are raised to the midpoint of the new guidance, he adds. However, a study of its CagriSema drug showed that the product is no better than Eli Lilly's Mounjaro in diabetes, which could pressure CagriSema estimates and thus Novo's long-term growth profile, which remains one of investors' biggest concerns. (dominic.chopping@wsj.com)
0553 GMT - Novo Nordisk's second quarter and guidance upgrade are clearly better than expected, but investors seem focused on disappointing study data and weight-loss pill sales, Sydbank's Soren Lontoft Hansen says. Novo Nordisk delivered positive growth rates and sent a very positive signal in terms of exchanging lower prices for increased volume, he says. "In our opinion, this should immediately give rise to a sigh of relief among investors." However, shares fell 6% in the U.S. and Sydbank says possible explanations include disappointing data for its developmental CagriSema drug compared to Eli Lilly's Mounjaro. "It puts a spotlight on the Novo Nordisk pipeline and its robustness." Also, although the Wegovy pill is booming, sales are slightly lower than expected, and the company also booked a major 6 billion Danish kroner noncash impairment charge. (dominic.chopping@wsj.com)
0201 GMT - WuXi AppTec's robust 1H growth and margin expansion is likely to support its ambitious targets, says Deutsche Bank's Cyrus Ng in a note, referring to the pharmaceutical-services company raising its 2026 guidance. The Chinese contract research, development, and manufacturing company has a leading position in late-stage and commercial projects, which offer strong earnings visibility and growth certainty, the analyst says. He raises his 2026-2027 revenue forecasts by 13%-17% and profit projections by 17%-18%. The stock also trades at an undemanding valuation, he says, despite broader industry recovery. Deutsche Bank raises its target price to 207.40 Hong Kong dollars from HK$167.40 and reiterates its buy rating. Its Hong Kong-listed shares rise 1.8% to HK$184.30. (megan.cheah@wsj.com)
0111 GMT - Hartalega's fiscal 2Q earnings could be weaker, weighed by lower average selling prices, says CIMB Securities analyst Chun Sung Oong in a note. He expects selling prices to normalize following a windfall 1Q, while profitability will also be affected by the delayed impact of higher raw material costs. In the longer term, earnings could recover once the glove maker raises selling prices from 3Q to pass on higher input costs. Oong cuts Hartalega's 2027-2028 core net profit estimates by 4%-14% to factor in lower-than-expected average selling prices guidance. CIMB lowers Hartalega's target price to 1.12 ringgit from 1.24 ringgit and maintains a hold rating. Shares are unchanged at 1.06 ringgit. (yingxian.wong@wsj.com)
0103 GMT - Hartalega's fiscal 1Q earnings likely marked the peak for the fiscal year, with margins likely to come under pressure in 2Q as higher-cost nitrile latex inventory coincides with lower average selling prices, Maybank IB analyst Wong Wei Sum says in a note. She expects price competition to intensify while higher energy costs further weigh on profitability later this year. She cuts her FY 2027 earnings forecast by 18% to factor in lower average selling prices. Cost optimization is expected to partially offset margin pressure, she adds. Maybank lowers Hartalega's target price to 1.09 ringgit to 1.10 ringgit while maintaining a hold rating on the stock. Shares are unchanged at 1.06 ringgit. (yingxian.wong@wsj.com)
1438 GMT - GSK's newly launched drugs will be key to reduce risk on the U.K. pharmaceutical company's outlook for next year, analysts at J.P. Morgan say. GSK recently launched blood-cancer drug Blenrep and asthma treatment Exdensur, while lung-cancer medicine Jideytro--which the company bought through its acquisition of Nuvalent--received U.S. approval last month. The trajectory of these products and others that are expected to reach the market next year like hepatitis B drug bepirovirsen and neladalkib--another lung-cancer drug from Nuvalent--will be increasingly focus for investors, the analysts say. The company's efforts to accelerate its strategy look encouraging but, with the next pivotal study results due to come only in 2028, potential risks to earnings in the near term might draw investors' attention, they add. Shares rise 0.2%. (adria.calatayud@wsj.com)
1418 GMT - BioNTech's next CEO will need to time to strengthen the German biotech company's oncology portfolio, Bernstein analysts say in a research note. A day after naming Guido Oelkers as its new CEO, BioNTech reported disappointing results and significantly lowered revenue guidance for this year, the analysts say. The company also cut its research-and-development spending guidance, prioritizing its late-stage pipeline, they add. "We still think [lung cancer drug] Gotistobart looks like a winner--but the other two key oncology drugs in development have significant questions," Bernstein says. Shares fall 1.4%.
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