Monday, July 18, 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 Apple Inc. (AAPL), UnitedHealth Group Incorporated (UNH), and Equinor ASA (EQNR). 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 >>>
Apple
shares have gained +3.6% over the past year against the Zacks Tech sector’s -24.7% decline and the S&P 500 index’s -9.9% decline. The company is benefiting from continued momentum in the Services and robust performance from iPhone, Mac, Wearables, and an expanding App Store ecosystem.
Nevertheless, the availability of new Mac Studio and new iPad Air is expected to drive top-line growth. Apple TV+ is gaining recognition due to award-winning shows. This bodes well for the Services segment. Services revenue growth is expected to be in strong double digits for the June quarter.
However, Apple did not provide revenue guidance for the third quarter of fiscal 2022. Apple expects COVID-induced supply chain disruptions and industry-wide silicon shortages to hurt the top line along with Unfavourable forex condition is also expected to hurt its revenues. The absence of Russian revenues will also hurt the top line.
(You can
read the full research report on Apple here >>>
)
UnitedHealth
shares have outperformed the Zacks Medical – HMOs industry over the past year (+31.2% vs. +26.6%). 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 and an attractive core business that continues to be driven by new deals, renewed agreements and expansion of service offerings.
For this year, 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 enables investments and prudent capital deployment through share buybacks and dividends.
However, softness in commercial business due to COVID-induced volatilities persists. Also, the rising operating costs are hurting UnitedHealth’s bottom line. As such, the stock warrants a cautious stance.
(You can
read the full research report on UnitedHealth here >>>
)
Equinor
shares have outperformed the Zacks Oil and Gas – Refining and Marketing industry over the past year (+75.4% vs. +46.2%). The company is one of the premier integrated energy companies, with operations spreading across 30 countries. In 2021, the company completed 21 exploration wells, with 8 commercial discoveries.
Equinor announced significant oil discoveries at the Johan Castberg field in the Barents Sea, which will further increase its profitability in the field. To combat climate change, the company is actively investing in renewable energy projects, comprising power generation from solar and wind energy. For 2022, Equinor announced the increase of the share buy-back program of up to $5 billion.
However, the company’s significant exposure to debt can affect its financial flexibility. Also, it is not being able to capture the potential profit growth from commodity prices that have reached record highs. As such, the stock warrants a cautious stance.
(You can
read the full research report on Equinor here >>>
)
Other noteworthy reports we are featuring today include QUALCOMM Incorporated (QCOM), GSK plc (GSK) and Eaton Corporation plc (ETN).
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
Robust Portfolio, Services Strength to Benefit Apple (AAPL)
Solid Top Line & Strong Cash Flows Drive UnitedHealth (UNH)
Equinor (EQNR) to Benefit From Rising Clean Energy Demand
Featured Reports
Qualcomm (QCOM) Rides on 5G Chip, Diversified Revenue Stream
Per the Zacks analyst, Qualcomm is well-positioned to benefit from solid 5G traction with greater visibility, heathy demand trends and diversified businesses to meet its long-term revenue targets.
Glaxo’s (GSK) Specialty Drugs Driving Sales in 2022
Glaxo’s specialty products like Dovato, Nucala, Trelegy Ellipta, Shingrix are driving sales, making up for a lower sales of established drugs due to generic erosion, per the Zacks analyst.
Wide Market Reach & New Product Development Aid Eaton (ETN)
Per the Zacks analyst Eaton’s operations in 175 countries across the world and development of new products through ongoing R&D investments will continue to drive demand and boost profitability.
Sysco (SYY) to Keep Gaining From Recipe for Growth Program
Per the Zacks analyst, Sysco’s Recipe for Growth has been aiding. This includes enhancing customers’ experience via digital tools; improving supply chain and having team-based selling among others.
Upbeat Air-Travel Demand Boosts Delta (DAL), High Costs Hurt
Improved air-travel demand, particularly on the domestic front, is driving Delta’s top line. Escalated fuel costs are, however, limiting bottom-line growth.
Expansion Efforts Aid Choice Hotels (CHH) Amid Demand Volatility
Per the Zacks analyst, Choice Hotels consistent expansion through acquisitions and franchise agreements are major positives. However, pandemic-induced disruptions and demand volatility are a concern.
Intuitive Surgical’s (ISRG) da Vinci System Helps Offset Risks
Per the Zacks analyst, growing adoption of Intuitive Surgical’s da Vinci system is driving its revenues as well as helping offsetting risks like COVID-19 resurgences and rising costs.
New Upgrades
BorgWarner (BWA) to Benefit From Charging Forward Project
The Zacks analyst is optimistic about BorgWarner’s Charging Forward project, which seeks to accelerate the firm’s e-mobility strategy and double its electrification revenues from the 2021 level.
Strong Demand & Pricing Actions to Drive Greif (GEF)
The Zacks analyst believes that Greif will benefit from strong demand in many of its key markets as well as its pricing actions and restructuring activities.
Robust Loan Growth, High Rates Aid Washington Federal (WAFD)
Per the Zacks analyst, supported by the rise in loan balances, Washington Federal’s top line will likely continue improving. Moreover, the recent rate hikes are expected to aid margin growth.
New Downgrades
Supply Chain Woes & High Debt Ail Western Digital (WDC)
Per Zacks analyst, pandemic induced supply chain troubles and component shortages continue to be a major headwind for WDC. Intensifying competition and high debt burden are other concerns.
Rising Costs, High Leverage Ail First American (FAF)
Per the Zacks analyst, First American’s rising costs due to higher personnel costs, premiums retained by agents, operating expenses weighs on margin. High leverage induce higher interest expense.
Weak Capital Markets, High Costs Hurt Morgan Stanley (MS)
Per the Zacks analyst, uncertainty over the performance of the capital markets remains a key concern for Morgan Stanley and is likely to keep hurting revenues. Rising expenses are other major woe.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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