Thursday, October 27, 2022
The Zacks Research Daily presents the best research output of our analyst team. Today’s Research Daily features new research reports on 16 major stocks, including UnitedHealth Group Incorporated (UNH), Johnson & Johnson (JNJ) and Walmart Inc. (WMT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
UnitedHealth’s shares have gained +19.3% over the past year against the Zacks Medical – HMOs industry’s gain of +19.1%. The Zacks analyst believes that the company’s top line has been growing and the momentum should continue in the years ahead on the back of a strong market position, new deals, renewed agreements and expansion of service offerings.
UNH’s solid health services segment provides diversification benefits. Its Government business remains well-poised for growth. A sturdy balance sheet enables investments. However, softness in commercial business due to COVID-induced volatilities persists. Rising operating costs are hurting margins.
(You can read the full research report on UnitedHealth here >>>)
Shares of Johnson & Johnson have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+5.8% vs. +9.7%). The Zacks analyst believes that macroeconomic headwinds like inflationary pressure, rising input costs and negative currency impact are hurting the company’s margins. Headwinds like generic competition and pricing pressure continue. Stelara’s upcoming loss of exclusivity in 2023 is a concern. Though J&J has taken meaningful steps to resolve its talc and opioid litigation, they continue to remain an overhang on the stock.
However, the company’s Pharma unit is performing at above-market levels, supported by blockbuster drugs, Darzalex and Stelara, and contribution from newer drugs, Erleada and Tremfya. Sales in the MedTech unit are recovering and J&J is focusing on growing this business through new products. J&J is making rapid progress with its pipeline and line extensions.
(You can read the full research report on Johnson & Johnson here >>>)
Shares of Walmart have outperformed the Zacks Retail – Supermarkets industry over the past three months (+8.8% vs. +8.0%). The Zacks analyst believes that the company has been benefiting from its robust omnichannel operations due to its efforts to enhance both store and online experience. Walmart has been particularly gaining from its efforts to boost delivery services through acquisitions and partnerships.
However, its consolidated operating income and earnings per share view suggest a decline from the year-ago period figures. The company is encountering cost pressure associated with fuel prices, supply chain and excess inventory.
(You can read the full research report on Walmart here >>>)
Other noteworthy reports we are featuring today include Amazon.com, Inc. (AMZN), The Coca-Cola Company (KO), and NVIDIA Corporation (NVDA).
Director of Research
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today’s Must Read
Solid Top Line & Strong Cash Flows Drive UnitedHealth (UNH)
J&J’s (JNJ) Three Segments Register Better Performance
Walmart (WMT) Benefits from Impressive E-Commerce Operations
Uber (UBER) Rides on Delivery Business Amid Rising Expenses
The Zacks Analyst likes Uber’s efforts to expand its Delivery operations in response to the surge in business. However, rising costs and expenses are concerning as they pose a threat to Uber’s bottom
Nexeo Acquisition, Productivity Actions Aid Univar (UNVR)
Per the Zacks analyst, Univar will benefit from the synergies of the Nexeo Solutions acquisition and efforts to drive productivity amid headwinds from higher input costs.
Solid Momentum in Cloud Business Driving SAP’s Performance
Per the Zacks Analyst, SAP’s performance is gaining from its strengthening cloud business, mainly Rise with SAP solution. However, weak uptake of software licenses and support offerings is a concern.
IBM Rides on Hybrid Cloud Strength, Holistic Growth Focus
Per the Zacks analyst, IBM is likely to benefit from a better business mix, improving operating leverage, solid hybrid cloud position and continued investments for inorganic growth opportunities.
Overseas Growth Aids DaVita (DVA) Amid Stiff Competition
The Zacks analyst is upbeat about DaVita’s steady expansion in international markets despite its operation in a tough competitive landscape.
Coca-Cola’s (KO) Digital Investments to Aid the Top Line
Per the Zacks analyst, Coca-Cola has been digitizing the enterprise for several years. It is strengthening consumer connections and piloting digital-enabled initiatives like B2B and B2C platforms.
NVIDIA (NVDA) Rides on Strong Adoption of GPUs, Partnerships
Per the Zacks analyst, rapid adoption of NVIDIA’s GPUs in the datacenter and automotive markets is a key growth driver. Partnership with companies like Arrow, Baidu, Daimler and Bosch is a tailwind.
Growing International Activity to Aid Oceaneering (OII)
The Zacks analyst believes that the outlook for Oceaneering International’s ‘Subsea Robotics’ unit is particularly impressive due to growing activity outside North America.n
Amazon (AMZN) Banks on Prime Momentum & Growing AWS Adoption
Per the Zacks analyst, Amazon is benefiting from Prime enabled fast delivery services and robust content portfolio. Further, its strengthening cloud offerings are aiding the adoption rate of AWS.
Online Strength & GenNext Stores to Aid Aaron’s (AAN) Top Line
Per the Zacks analyst, Aaron’s has been gaining from better-than-expected customer demand, increased online traffic and strength in GenNext stores. This led to revenue growth of 31.2% in Q3.
787 Program Issue, Supply Chain Impact Hurts Boeing (BA)
Per the Zacks analyst, production quality issues for Boeing’s 787 program led it to incur $1.4 billion cumulative abnormal costs through September 2022. Supply chain disruption also hurts the stock.
Lack of Hedge Protection Likely to Mar Cenovus’ (CVE) Margin
Per the Zacks analyst, Cenovus’ lack of any hedge protection exposes it to potential weakness in crude prices more than some peers. Rising expenses for purchased products are also concerning.
Inflationary pressures Hurts Domino’s Pizza (DPZ) Margins
Per the Zacks analyst, inflationary pressures in commodity, labor and fuel costs continues to hurt margins. The company has been witnessing labor challenges in a handful of markets.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
CocaCola Company The (KO) : Free Stock Analysis Report
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research