By Four weeks from today, on Nov. 5, voters will determine which direction our great country takes over the next four years.
Although not every bill that comes out of Washington, D.C., has bearing on the stock market, the economic proposals that are, ultimately, put into place by the incoming president and Congress will help shape the landscape for corporate America in the coming years.
Novo Nordisk
A second market-leading company that could struggle mightily if Kamala Harris wins in four weeks is Danish-based pharmaceutical company Novo Nordisk (NYSE: NVO).
Novo Nordisk found its way into the spotlight thanks to its blockbuster duo of injectable glucagon-like peptide-1 (GLP-1) drugs, Ozempic and Wegovy. Ozempic is approved as a type 2 diabetes and long-term weight management treatment, while Wegovy is a weight management therapy for patients with at least one weight-related condition, such as type 2 diabetes, high cholesterol, or high blood pressure. GLP-1 drugs are the first prescription weight-loss breakthrough from big pharma in quite some time.
However, Harris has made bringing prescription drug costs down a key theme of her campaign. While the Joe Biden and Kamala Harris administration praised Eli Lilly for lowering the cost of GLP-1 drug Zepbound in August, it’s called on other GLP-1 drugmakers to follow suit.
Novo Nordisk doesn’t seem eager to heed that call. The company’s CEO, Lars Jorgensen, defended his company’s stance in front of a U.S. Senate committee in September to charge $1,349 (retail) for a 28-day supply of Wegovy and $968 (retail) for a 28-day supply of Ozempic. Novo Nordisk is heavily reliant on Ozempic to propel future earnings growth. Not to mention, Wall Street is counting on Ozempic to buoy the company’s outsized earnings multiple — 27 times forward-year earnings.
The uncertainty surrounding domestic drug pricing and what Harris would be able to accomplish in the Oval Office might be enough to halt what’s been nothing short of a parabolic move higher for Novo Nordisk over the last three years.
Apple
The third highly influential stock that could plunge if Kamala Harris wins in November is none other than Wall Street’s largest publicly traded company by market cap, Apple (NASDAQ: AAPL). Interestingly enough, this is a company that may also struggle if Donald Trump wins.
Apple is best-known for being a dominant force in tech products, such as the iPhone, iPad, and Mac. But the lion’s share of the company’s growth at the moment traces back to its Services segment. CEO Tim Cook is overseeing a multiyear transformation that’s emphasizing the importance subscription services. A subscription-driven model should, ideally, improve the company’s operating margin over time and smooth out the revenue valleys that often occur during iPhone upgrade cycles.
But Apple could face something of a double whammy if Harris were to win and is able to implement the full scope of her economic proposals.
To begin with, raising the corporate tax rate by 33% would potentially leave Apple with less capital to funnel toward share buybacks. No public company has more directly benefited from share repurchases than Apple.
Since the start of 2013, Apple has repurchased $700.6 billion worth of its common stock, which has helped to increase its earnings per share (EPS) from what would be less than $4 in fiscal 2024 (ended Sept. 30, 2024) if it had never bought back its stock, to a consensus estimate of $6.68 per share in the current fiscal year. Without significant buybacks, Apple’s stalled growth engine would be exposed.
Additionally, Kamala Harris has proposed taxing unrealized capital gains. Although this tax is strictly focused on individuals with net wealth above $100 million, a lot of the wealthiest tax payers are likely to have a stake, directly or via exchange-traded fund, in Wall Street’s largest company by market cap.
Whether it’s Donald Trump’s proposed 60% tariff on imports from China or Harris’s plan to increase taxes on the ultra-wealthy and businesses, there’s a real possibility Apple comes out a loser on Nov. 5.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sean Williams has positions in Meta Platforms. The Motley Fool has positions in and recommends Apple and Meta Platforms. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
Prediction: 3 of Wall Street’s Most Influential Stocks Can Plunge if Kamala Harris Wins in November was originally published by The Motley Fool
