Eli Lilly’s Obesity Drug Surge; Plug Power’s Hydrogen Ecosystem; OPAL’s Renewable Natural Gas Focus
By: Visible Alpha Research & Innovation Lab
In our weekly round-up of the top charts and market-moving analyst insights: Eli Lilly’s (NYSE: LLY) Mounjaro is poised for a surge in sales with expected approval for obesity; Plug Power (NASDAQ: PLUG) is expected to see rising revenues fueled by its hydrogen ecosystem; OPAL Fuels’ (NASDAQ: OPAL) strategic focus on renewable natural gas is set to boost future revenue.
Eli Lilly’s Mounjaro Set for Revenue Surge with Expected Obesity Approval
According to Visible Alpha consensus, Eli Lilly’s (NYSE: LLY) Mounjaro is expected to generate revenue of $4.61 billion in 2023 and more than double in 2024, reaching a total of $9.51 billion. Looking ahead to 2030, consensus estimates suggest that Mounjaro’s revenue for type 2 diabetes (T2D) and obesity is projected to reach as high as $42 billion.
Mounjaro was approved in May 2022 for T2D, but has not yet been approved for obesity. In October 2022, Eli Lilly secured FDA fast-track designation for the possible approval of Mounjaro for obesity. FDA approval for obesity is expected by the end of 2023. Risk-adjusted revenue projections for Mounjaro are nearly as high as projections that are not adjusted for risk, as the probability of success for FDA approval for obesity is 97.33%, according to Visible Alpha consensus.
Mounjaro (tirzepatide) is a dual agonist targeting the GLP-1 (glucagon-like peptide-1) and GIP (glucose-dependent insulinotropic polypeptide) receptor pathways. Agonism of GLP-1 and GIP receptors leads to an increase in insulin secretion, improvement of insulin sensitivity, reduction in glucagon levels, decreased food intake, and slowing of gastric emptying. The net effect is glucose control for T2D, and weight loss for obesity.
Plug Power to See Rising Revenues Fueled By Hydrogen Ecosystem
According to Visible Alpha consensus, hydrogen fuel cell company Plug Power (NASDAQ: PLUG) is expected to see revenues jump across all of its segments in the forecast period, boosted by the company’s investments in building a hydrogen ecosystem. Plug Power has ambitious plans to build a vertically integrated ecosystem with the aim of becoming a one-stop shop for the hydrogen economy.
Analysts expect the company’s three main revenue segments — product, services, and fuel delivered to customers — to see annual revenue growth in 2023 of 85%, 17%, and 38%, respectively. Between 2023-2030, total product revenue is projected to grow at a CAGR of 32%, services at 27%, and fuel delivered to customers at 60%.
Within products, the company’s largest revenue-generating segment, revenue from electrolyzers is projected to reach $210 million (+639% YoY) in 2023, hydrogen infrastructure sites revenue to $266 million (+88% YoY), and cell system/forklift units/gendrive units revenue to $298 million (+43% YoY). The company’s total revenue is projected to be $1.2 billion in 2023, and analysts expect the company to become profitable by 2024, generating an estimated gross profit of $228 million.
OPAL Fuels’ Strategic Focus on Renewable Natural Gas to Boost Future Revenue
OPAL Fuels (NASDAQ: OPAL), which specializes in the production and distribution of renewable natural gas (RNG) and renewable electricity, has recently made a strategic shift, placing a stronger emphasis on RNG generation. With the RNG transition, analysts anticipate robust revenue growth for the company in the coming years. According to Visible Alpha consensus, OPAL Fuels is expected to boost its RNG production volume from an estimated 3.0 million MMBtu in 2023 to a projected 9.7 million MMBtu by 2025, growing at a CAGR of 82%.
Total revenue for the company is estimated to grow by 15% year over year in 2023, partially offset by an expected 7% decline in RNG revenue. This decline is primarily due to the company selling fewer units of RNG fuel in the first half of 2023, deferring environmental credit sales amid lower market prices, as the market awaited new clean fuel standards from the U.S. Environmental Protection Agency (EPA). In 2024, however, analysts expect RNG revenues to pick up, growing 100% year over year to $236 million, while total revenue is projected to grow by 56% to $421 million.
Tesla’s Race to Challenge Ford and GM; Nel ASA’s Rising Green Hydrogen; AppLovin’s Software Surge
By: Visible Alpha Research & Innovation Lab
In our weekly round-up of the top charts and market-moving analyst insights: Tesla (NASDAQ: TSLA) is poised to challenge Ford Motor (NYSE: F) and General Motors (NYSE: GM) in automotive units sold by 2027; Nel ASA’s (OSE: NEL) green hydrogen revenue is expected to surge in the coming years amid the clean energy wave; and AppLovin (NASDAQ: APP) is projected to see software platform revenue grow by 60% year over year in 2023.
Tesla Poised to Challenge Legacy Automakers by 2027
While Ford Motor (NYSE: F) and General Motors (NYSE: GM) plan to ramp up EV production, analysts expect Tesla (NASDAQ: TSLA) to sell nearly as many automotive units overall as General Motors by 2027. Based on Visible Alpha consensus estimates, Tesla is forecasted to sell 4.21 million units in 2027, up from 1.85 million units expected in 2023. This is in comparison to Ford’s 4.72 million units and General Motors’ 4.25 million units expected to be sold in 2027.
In terms of revenue, analysts expect Tesla’s automotive revenue to surpass both Ford and General Motors by 2027. Tesla’s automotive revenue is projected to grow from an estimated $85 billion in 2023 to $185 billion by 2027. In comparison, Ford is projected to generate $178 billion while General Motors is expected to generate $172 billion in 2027. Between 2023-2027, Tesla’s automotive revenue is expected to grow at a CAGR of 21%, whereas Ford and General Motors are both expected to see their automotive revenues grow at a CAGR of 3%.
Nel ASA’s Green Hydrogen Revenue to Surge Amid Clean Energy Wave
Nel ASA (OSE: NEL), a Norwegian company specializing in hydrogen production solutions, is poised for significant growth in the forecast period according to Visible Alpha consensus. The company is a leading provider of hydrogen electrolyzers and is a key player in the emerging hydrogen economy. Green hydrogen, recognized as the most sustainable type of hydrogen, is positioned to be pivotal in the global shift towards cleaner and more sustainable energy sources.
Analysts expect the company to see revenue grow at a CAGR of 41% between 2020 and 2030. Looking at the company’s revenue segments, Hydrogen Electrolyser revenue is expected to grow at a CAGR of 47% between 2020-30, while Hydrogen Fueling revenue is projected to grow at a CAGR of 28%. Analysts expect the company to turn profitable by 2026, generating an operating income of NOK 7.9 million.
AppLovin to See Strong Software Revenue Growth Amid Strategy Shift
AppLovin (NASDAQ: APP), a mobile advertising company that delivers advertisement platforms for app developers, is projected to see software platform revenue grow by 60% year over year in 2023, based on Visible Alpha consensus. This growth is expected to be driven by Axon 2.0, the latest version of the company’s AI-based ad tech platform, which it launched earlier this year.
While consumer in-app purchases used to be the company’s primary revenue-generating segment, analysts anticipate that software platform revenue will outpace in-app revenue in 2023, reaching a total of nearly $1.68 billion. As the company shifts its focus towards its software platform, app-related revenue is projected to continue to decline. After dropping by 11% last year, in-app advertising revenue from the company’s business segment is expected to decline by 23% in 2023, while in-app purchase revenue from its consumer segment is expected to decline by 19% in 2023, after also declining by around 19% in 2022.
Memory Chip Dip; Pfizer’s New Cancer Drug; Rare Earths Slump; Oil Refiners’ Profit Slide
By: Visible Alpha Research & Innovation Lab
In our weekly round-up of the top charts and market-moving analyst insights: Memory chip makers are expected to see revenues decline in 2023; Pfizer’s (NYSE: PFE) Elrexfio marks the third bispecific antibody approved for multiple myeloma by the FDA; Lynas Rare Earths (ASX: LYC) is projected to experience a decline in revenue in 2023-24; and U.S. oil refiners are expected to see a decrease in gross profit per unit between 2023-2025.
Memory Chip Manufacturers to See Revenue Dip in 2023, Recovery from 2024 Onward
Memory chip makers, including SK hynix (KRX: 000660), Micron Technology (NASDAQ: MU), Nanya Technology (TWSE: 2408), and GigaDevice Semiconductor (SSE: 603986) are expected to see revenues decline in 2023, according to Visible Alpha consensus. The memory semiconductor industry is dealing with overcapacity and excess inventory coupled with sluggish demand. This has been placing downward pressure on average selling prices (ASP) of DRAM (Dynamic Random-Access Memory) and NAND memory technologies. Analysts expect both DRAM and NAND revenues to decline in 2023 as sluggish demand and high inventory eat into ASPs. However, these companies are expected to see revenue rebound starting in 2024 as the market potentially transitions towards undersupply.
Pfizer Enters Race for Bispecific Antibody Treatment of Multiple Myeloma
Pfizer’s (NYSE: PFE) Elrexfio marks the third bispecific antibody approved for multiple myeloma by the FDA – Elrexfio was granted accelerated (conditional) approval by the FDA on August 14, 2023. The other two bispecific antibodies approved for multiple myeloma belong to Johnson & Johnson (NYSE: JNJ): Tecvayli (approved in October 2022) and Talvey (approved on August 10, 2023).
According to Visible Alpha consensus, analysts’ expectations for the probability of success of full approval for Elrexfio is 59%, reflecting the risk associated with a successful registration (Phase 3) trial for full approval. Visible Alpha consensus risk-unadjusted revenue projections of close to $1.8 billion in 2031 (peak) are significantly lower than PFE’s guidance of $4 billion in peak sales. Peak risk-adjusted revenue expectations in 2031 are $971M.
Elrexfio (elranatamab) is a bispecific antibody that targets B-cell maturation antigen (BCMA) and CD3 on T cells. Elrexfio is a T cell engager that activates T cells, which results in killing multiple myeloma tumor cells.
Lynas Rare Earths to Face Revenue Slump Amid Price Volatility
Lynas Rare Earths (ASX: LYC), an Australian rare-earths mining and processing company, is projected to experience a decline in revenue in 2023-24, according to Visible Alpha consensus. This decline is primarily attributed to an expected decrease in revenue generated from neodymium and praseodymium (NdPr) oxide, which constituted 96% of the company’s total revenue in 2022. NdPr are essential components in the manufacturing of high-performance magnets that are used in electronics, electric and hybrid vehicles, and wind turbines, among others.
Prices of rare earth minerals have declined over the past year due to increased supply from China and softer demand from renewable energy companies and the automotive sector. Analysts anticipate that the lower average realized prices from NdPr will be key to pushing down revenue expectations between 2023-24. However, it is expected that revenues and, to a lesser extent, prices will rebound starting in 2025.
Gross Profit Per Unit for Leading U.S. Oil Refiners to Decline Along With Easing Crude Oil Prices
According to Visible Alpha consensus estimates, Phillips 66 (NYSE: PSX), Valero Energy (NYSE: VLO), Marathon Petroleum (NYSE: MPC), PBF Energy (NYSE: PBF), and HF Sinclair (NYSE: DINO) are projected to see a decrease in gross profit per unit between 2023-2025. U.S. refiners enjoyed bumper profits in 2021-22, as Western sanctions on Russia and COVID lockdowns in China crimped global fuel supplies at a time when demand was recovering from pandemic lows, creating increased demand for U.S. crude oil. In 2023, however, rising oil exports from Russia and China are expected to dampen the demand for U.S. crude derivatives.
The decline in profits is also partly due to the anticipated decline in crude oil prices during the forecast period. Lower crude oil prices translates to reduced prices for refined products, impacting margins for refiners. Crude oil prices are anticipated to decrease to an average of $78 per barrel (bbl) in 2023, down from the peak levels observed last year. Despite the decline, profits are generally still expected to maintain above pre-pandemic levels.
Shell Powers Up Renewables; AB InBev to See U.S. Decline; WHSmith Targets Growth in Airports
By: Visible Alpha Research & Innovation Lab
In our weekly round-up of the top charts and market-moving analyst insights: Shell (LSE: SHEL) looks to power up renewables; analysts see declines in North America sales volume for AB InBev (EBR: ABI); WHSmith’s (LSE: SMWH) travel division is expected to see strong revenue growth.
Analysts Expect Shell to Power Up Renewables
Shell (LSE: SHEL) is expected to raise its investment in renewable energy and low-carbon projects in accordance with the EU’s carbon emission regulations. To achieve net-zero emissions by 2050, Shell plans to invest $10-15 billion between 2023-25 in developing low-carbon energy solutions such as biofuels, hydrogen, EV charging, and carbon capture & storage.
In 2023, according to Visible Alpha consensus, analysts expect the company to allocate $9.2 billion to its downstream business, $8.1 billion to its upstream business, $4.8 billion to integrated gas, and $3.1 billion to renewables.
Analysts Expect Declining North America Sales Volume for AB InBev
Analysts expect North America sales volume for AB InBev (EBR: ABI), the company behind Budweiser and Bud Light beer brands, to decline by 9% year over year in 2023, according to Visible Alpha consensus.
The U.S. is expected to account for this sharp decline, with U.S. sales volume projected to fall by 10%. The strongest sales volume growth in 2023 is projected to occur in the Asia-Pacific region at 7%, followed by the Middle Americas (Central America, Mexico, Caribbean) at 1%.
Travel Division to Propel WHSmith’s Revenue Growth, Say Analysts
UK-based books and convenience retailer WHSmith (LSE: SMWH) is expected to continue seeing revenue growth driven by its travel division (airports, train stations, motorway service areas, and hospitals).
According to Visible Alpha consensus, the retailer’s travel segment revenue is expected to increase by 44% in 2023 compared to the previous year. The British retailer is expanding its travel division, with focused store expansions outside of the U.K., especially in North America.
Oil and Gas: Consensus Data and Current Events
By: Erin Gifford
To say the last few years have been rocky in the oil and gas industry, specifically the exploration and production (E&P) sector, is an understatement.
Read more
Fueling Up Environmentally-Friendly Alternatives: Green Diesel
By: Anisha Talpade
With sustainability initiatives and clean-air regulations increasingly grabbing news headlines around the world, it should come as no surprise that today’s companies are seeking out alternative fuels that are more environmentally friendly. Renewable diesel is one such alternative fuel, and is often referred to as “green diesel”. The “green” refers to the fact that renewable diesel is biomass-based, produced through thermochemistry processes. According to the U.S. Energy Information Administration, the biomass materials used in production can include crop residues, wood and sawdust, and switchgrass. Because renewable diesel is chemically the same as petroleum diesel, this green diesel can easily be used in pipelines, tanks, and engines originally meant for petroleum diesel fuel.
In 2019, integrated energy companies were expecting 2020 to provide epic delivery of cash flow, but the outlook quickly soured when the Covid-induced global recession drove Brent prices from over $50 to below $20 in less than a month. Government-led lockdowns kept everyone at home, grounded flights, interrupted industrial production and led to steep declines in energy demand. In mid-2020, large cap integrated energy companies were priced to fail, and investors saw little upside opportunity. Read more
Forecasting the Global Business Impact and Recovery from Covid-19
By: Visible Alpha Research & Innovation Lab
A Global Meta-Analysis of Investment Research Analyst Forecasts
While the world reels from the social and economic shocks caused by the Covid-19 pandemic and the measures taken to mitigate its impact, the rebound in equity markets suggests that investors are already looking forward to a return to some semblance of normalcy.
But how does the market expect that recovery to play out?
