Better inventory reports for Alphabet, UnitedHealth and Costco
Monday, May 23, 2022
Zacks Research Daily features top research results from our team of analysts. Today’s Research Daily features new research reports on 16 major stocks, including Alphabet Inc. (GOOGL), UnitedHealth Group Incorporated (UNH) and Costco Wholesale Corporation (COST). These research reports have been handpicked from the approximately 70 reports published today by our team of analysts.
You can see all today’s research reports here >>>
Shares of Alphabet have lagged the broader market this year (-21% vs -16%), but held up better than the tech sector (-21% vs -26.7%). The weakness in the stock reflects the shift in sentiment towards faster growing stocks in a rising rate environment. But the company is well-positioned for the long term, given its search dominance, lucrative advertising business, and a host of next-gen investments.
The Zacks analyst believes Alphabet’s strong cloud division continues to be the main catalyst. Moreover, the expansion of data centers will continue to strengthen its presence in the cloud space. Additionally, major updates in its search segment improve search results. Additionally, Google’s mobile search is constantly gaining popularity. Also, the focus on AI techniques and the home automation space is expected to drive the company’s growth. However, growing litigation and the Russian-Ukrainian war remain a concern.
(You can read the full Alphabet research report here >>>)
Shares of UnitedHealth outperformed the Zacks Medical – HMO industry over the past year (+18.2% vs. +16.2%) driven by a strong market position and an attractive core business that continues to be driven by new transactions, renewed agreements and expansion of the offerings service.
UnitedHealth reported strong results in the first quarter of 2022 thanks to growth in its business segments. A strong balance sheet allows for investments and prudent deployment of capital through share buybacks and dividends. However, weakness in trade cases due to COVID-induced volatilities persists. In addition, rising operating costs are hurting its profits.
(You can read the full UnitedHealth research report here >>>)
Shares of Costco outperformed the industry Zacks Retail – Discount Stores over the past year (+8.6% vs -11.0%). The Zacks analyst believes that as a defensive consumer stock, Costco has weathered the market turmoil fairly well. The discount retailer’s key strengths are strategic investments, a customer-centric approach, merchandise initiatives and a focus on membership growth. These factors have helped it record impressive sales and profit figures.
A favorable product mix, steady store footfall, pricing power and strong liquidity position should help Costco continue to outperform. Although it trades at a premium to its peers, the Zacks analyst believes the company’s long-term growth prospects should help the stock rally strongly.
(You can read the full Costco research report here >>>)
Other noteworthy reports we feature today include Cisco Systems, Inc. (CSCO), Wells Fargo & Company (WFC), and Sanofi (SNY).
Director of Research
Note: Sheraz Mian leads the equity research department at Zacks and is a well-known expert on overall earnings. He is frequently quoted in the written and electronic press and publishes the weekly Earnings Trends and Revenue overview reports. If you would like to receive an email notification whenever Sheraz publishes a new article, please click here>>>
To read today
Alphabet (GOOGL) benefits from cloud and search initiatives
UnitedHealth (UNH) will ride on UnitedHealthcare and Optum units
Decent comparable sales to fuel Costco’s top line (COST)
Cisco (CSCO) enjoys strong adoption of security products
According to the Zacks analyst, Cisco benefits from a rapidly growing security market driven by robust adoption of identity and access security solutions, advanced threats and unified threat management.
Cost control helps Wells Fargo (WFC) amid falling revenue
According to the Zacks analyst, Wells Fargo’s cost-cutting measures, such as branch closures and downsizing, will help offset declining revenue trends resulting from mortgage banking revenue headwinds.
Sanofi (SNY) has a strong and expanding pipeline
The Zacks analyst believes Sanofi’s R&D pipeline is strong. It has launched several new drugs over the past two years and is expanding its pipeline through mergers and acquisitions deals.
Support for strategic acquisitions Schwab (SCHW) in a context of falling interest rates
According to the Zacks analyst, Schwab’s inorganic growth initiatives and other revenue diversification efforts will help earnings. Despite expected rate hikes, relatively low rates could hurt sales.
America Movil (AMX) benefits from growing subscriber base
According to the Zacks analyst, America Movil’s performance is improving thanks to the growth in the subscriber base. However, intense competition from US telecommunications giant AT&T and high debt levels are major concerns.
Strategic alliances help Walgreens (WBA) amid heated rivalry
The Zacks analyst is optimistic about Walgreens’ recent collaborations with VillageMD and Vitamin Angels. Yet growing competition from traditional drugstore retailers continues to pose challenges.
FLEETCOR (FLT) Rolls On Redemptions Amid Higher Interest Charges
The Zacks analyst likes FLEETCOR’s buyout strategy to expand the customer base and diversify its service offerings across industries. Higher interest charges are likely to keep net income under pressure
Multi-Basin Portfolio, Low Cost Asset Aid Murphy Oil (MUR)
According to the Zacks analyst, Murphy Oil’s maintenance of a multi-basin portfolio is driving production and low-cost operating assets in North America will drive operations.
PBF Energy (PBF) continues to benefit from refining activity
According to the Zacks analyst, PBF Energy’s refining business should benefit from growing demand for refined petroleum products.
Kronos Worldwide (KRO) Gains on Rising TiO2 Demand and Prices
According to the Zacks analyst, higher demand for titanium dioxide (TiO2) will boost the company’s sales volumes. Higher average selling prices for TiO2 will also support its margins.n
Boeing 787 problem, the impact of the pandemic on Hurt Triumph (TGI)
According to the Zacks analyst, the drop in the production rate and the suspension of deliveries of Boeing 787s could have an impact on Triumph Group’s results. Additionally, a supply chain issue stemming from COVID-19 could adversely affect the stock.
Supply chain woes and higher costs Dent Gap Margins (GPS)
The Zacks analyst said increased air freight due to supply chain issues weighed on Gap’s fourth-quarter margins. High marketing and technology costs, as well as compensation and fulfillment are also deterrents.
Continued weakness in China Ails VF Corp (VFC) revenue
According to the Zacks analyst, VF Corp’s business in China remains impacted by COVID-related lockdowns, travel restrictions and consumer anxiety. It now expects business in China to be down nearly 35% in the first quarter.
5 shares ready to double
Each was handpicked by a Zacks expert as the #1 preferred stock to earn +100% or more in 2021. Previous recommendations have skyrocketed +143.0%, +175.9%, + 498.3% and +673.0%.
Most of the stocks in this report fly under the radar on Wall Street, which provides a great opportunity to get in on the ground floor.
Today, check out these 5 potential home runs >>
Click to get this free report
Wells Fargo & Company (WFC): Free Inventory Analysis Report
Sanofi (SNY): Free Stock Analysis Report
UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report
Cisco Systems, Inc. (CSCO): Free Inventory Analysis Report
Costco Wholesale Corporation (COST): Free Inventory Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
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Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.