During a challenging third quarter for Wall Street, one healthcare stock stood out as a clear winner. While two solar companies faced a downturn, Amgen (ticker: AMGN) shone brightly, claiming the top spot in both the Dow Jones Industrial Average and Nasdaq 100. According to Dow Jones Market Data, Amgen’s stock rose by a remarkable 22% over the last three months.
Amgen’s success can be attributed to several factors. The biotechnology company exceeded market expectations with its second-quarter earnings and revenue. In addition, it raised its revenue guidance for 2023, further boosting investor confidence.
Arvind Sood, vice president of investor relations, highlighted Amgen’s strong performance during the recent earnings call. He emphasized the company’s continuous growth in unit volume and expressed optimism about their outlook for the rest of the year.
Furthermore, Amgen’s acquisition of Horizon Therapeutics (HZNP), valued at $27.8 billion, received approval from the Federal Trade Commission on September 1. However, the deal came with certain restrictions aimed at ensuring fair competition within the biopharmaceutical industry.
While Amgen stole the limelight in the healthcare sector, Zions Bancorp (ZION) claimed the top position in the S&P 500. With a remarkable 32% rise in the quarter, Zions benefited from strong second-quarter earnings and a rebound in customer deposits. Earlier in the year, regional banks had faced challenges following the shutdown of Silicon Valley Bank and Signature Bank.
Citi analyst Keith Horowitz recently initiated coverage of Zions with a Buy rating. He expects the bank to perform well in the third quarter, with positive revisions to its net interest income outlook.
Overall, these standout performers reflect the resilience and potential within the healthcare and banking sectors, promising encouraging opportunities for investors.
Morgan Stanley Analyst Downgrades Zions Shares
Morgan Stanley analyst Manan Gosalia recently downgraded shares of Zions to Underweight from Equal Weight. In a research note, Gosalia noted that after a significant rally from May lows, ZION is now trading in line with its peers. This is a change, as Zions had been consistently at a discount for the majority of 2023.
Worst Performing Stocks
Walgreens Boots Alliance
Walgreens Boots Alliance (WBA) experienced a significant decline of 22% in the third quarter, making it the worst-performing stock in the Dow. The stock has declined by a staggering 41% this year. In June, the retail pharmacy chain lowered its full-year profit outlook due to a drop in demand for Covid-19 tests. The stock faced further challenges in July when Chief Financial Officer James Kehoe announced his departure. The situation worsened when Chief Executive Rosalind Brewer stepped down from her role since 2021 on September 1.
SolarEdge Technologies (SEDG) had a difficult quarter as it became the worst-performing stock in the S&P 500, tumbling by 51%. As interest rates increased, homeowners became hesitant to finance expensive house projects, affecting the solar panel maker. In August, SolarEdge announced lower-than-expected third-quarter revenue projections of $880 million to $920 million, compared to Wall Street estimates of $1.05 billion.
Enphase Energy (ENPH), known for its microinverters that convert sunlight into usable power, also experienced a decline, falling by 28% and becoming the worst stock in the Nasdaq 100. The company issued third-quarter revenue guidance below Wall Street consensus due to a decline in solar-power demand.
However, Seaport Research Partners analyst Tom Curran recently upgraded shares of Enphase to Buy from Neutral. He believes the solar industry will start recovering in 2024 as interest rates cool down. Curran suggests that investors should consider getting into the stock early after a year of declines to “catch the sunrise.”