Wednesday, March 9, 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), Accenture plc (ACN) and Union Pacific Corporation (UNP). 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 >>>
Shares of
UnitedHealth
have outperformed the Zacks Medical – HMOs industry over the past year (+34.5% vs. +30.6%). The company’s top line has been growing, and the Zacks analyst believes that the momentum should continue in the years ahead on the back of a strong market position and an attractive core business that continues to be driven by new deals, renewed agreements and expansion of service offerings.
For 2022, the company expects revenues in the range of $317-$320 billion. Its solid health services segment provides diversification benefits. The firm’s government business remains well-poised for growth. A sturdy balance sheet and solid cash generation abilities enable investments and prudent capital deployment through share buybacks and dividends.
However, softness in commercial business due to the COVID-induced volatilities persists. Also, rising operating costs are hurting its profits. As such, the stock warrants a cautious stance.
(You can
read the full research report on UnitedHealth here >>>
)
Shares of
Accenture
have outperformed the S&P 500 index over the past year (+18.6% vs. +7.6%), with the stock benefiting partly due to earnings and revenue beat in the past four quarters. The Zacks analyst believes that the company has been steadily gaining traction in its outsourcing and consulting businesses. The company has been strategically enhancing its cloud and digital marketing suite through buyouts and partnerships.
The company’s strong operating cash flow has helped it reward its shareholders in the form of dividend payments and share repurchases, and pursue opportunities in areas that show true potential. On the flip side, pricing pressure due to significant competition from strong companies like Genpact, Cognizant and Infosys, remains a concern. Global presence exposes it to foreign currency exchange rate fluctuations. Buyout-related integration risks continues to remain a concern.
(You can
read the full research report on Accenture here >>>
)
Shares of
Union Pacific
have outperformed the Zacks Transportation – Rail industry over the past year (+19.7% vs. +8.7%). The Zacks analyst believes that Union Pacific’s efforts to reward its shareholders through dividends and buybacks even in the current uncertain scenario is indeed commendable. The company hiked dividend twice in 2021. Union Pacific is also active on the buyback front. Management anticipates share repurchases in 2022 to be in line with the 2021 levels of $7.3 billion. The company’s strong free cash flow generating ability supports its shareholder-friendly activities.
However, escalation in fuel costs (up 56% in 2021) as oil prices move north induced a 7% rise in operating expenses. High debt/EBITDA ratio and tepid automotive demand are further concerns. Moreover, the company’s operations in the near term are likely to be impacted by the omicron-induced volatility.
(You can
read the full research report on Union Pacific here >>>
)
Other noteworthy reports we are featuring today include The Kroger Co. (KR), The Boeing Company (BA) and Prologis, Inc. (PLD).
Sheraz Mian
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
UnitedHealth’s (UNH) Solid Top Line Aids, High Costs Hurt
Accenture (ACN) Continues to Benefit From Acquisitions
Freight Revenues Cushion Union Pacific (UNP), High Costs Ail
Featured Reports
No Sales, Promising Pipeline Aids Reata’s (RETA) Prospect
Per the Zacks analyst, Reata has two promising late-stage pipeline candidates and is focusing on getting approval for them. However, recent pipeline setbacks are raisng concerns.
Antero Resources (AR) Banks On Prolific Marcellus Assets
The Zacks analyst is upbeat about Antero Resources’ 1,550 premium drilling locations in the Marcellus shale play, brightening its production outlook. Yet, rising transportation costs are concerning.
Engine Products Unit Aids Donaldson (DCI), Rising Costs Hurt
Per the Zacks analyst, Donaldson is enjoying strong momentum in engine products and aftermarket businesses.
Viasat (VSAT) Likely to Benefit from a Holistic Growth Model
Per the Zacks analyst, Viasat is likely to benefit from an impressive bandwidth productivity and buyout of smaller firms that expand its mobile broadband coverage and global service capabilities.
Solid Order Growth Boost Boeing (BA), 787 Program Issues Woe
Per the Zacks analyst, solid order flow and deliveries for its products tend to boost Boeing’s revenue growth prospects. Yet, 787 program related production quality issues might hurt its margins
E-commerce Adoption, High Inventory to Aid Prologis (PLD)
Per the Zacks analyst, the fast adoption of e-commerce and high inventory levels will drive demand. Given Prologis’ capacity to offer premium facilities in key markets, it is poised to bank and grow.
Choice Hotels (CHH) Banks on Unit Growth Amid Demand Volatility
Per the Zacks analyst, Choice Hotels consistent expansion through acquisitions and franchise agreements are major positives.
New Upgrades
Digitization Holds the Key to Kroger’s (KR) Sales Growth
Per the Zacks analyst Kroger has been investing on enhancing digital capabilities in order to better engage with customers. Management remains committed to double digital sales by 2023.
Nielsen (NLSN) Rides on Strength in Measurement Solutions
Per the Zacks analyst, Nielsen is benefiting from solid momentum across Measurement Solutions which is being driven by the strength across national and digital measurement products.
Reducing Costs, Solvency Level Aid Virtu Financial (VIRT)
Per the Zacks analyst, its decreasing expenses owing to solid restructuring initiatives poise it well for growth. Moreover, strong capital position allows investment in the future.
New Downgrades
Weak Online Business Amid Stiff Competition Hurts Zoom (ZM)
Per the Zacks analyst, weakness in online business amid stiff competition from Microsoft and Cisco is expected to hurt top-line growth in the near term.
Rising Material Cost Hurts IPG Photonics’ (IPGP) Prospects
Per the Zacks analyst, IPG Photonics is suffering from inflationary pressure on input costs. Increasing lead time for certain components is a significant headwind.
Life and Annuity Products Aid Brighthouse (BHF), Expenses Hurt
Per the Zacks analyst, Brighthouse is set to grow on compelling suite of life and annuity products, new sales of insurance products and expanding distribution network.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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