Yahoo Finance Top Analyst Reports for Microsoft, UnitedHealth & HSBC
Monday, September 25, 2023
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 Microsoft Corporation (MSFT), UnitedHealth Group Incorporated (UNH) and HSBC Holdings plc (HSBC). 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 >>>
Microsoft shares have gained +33.1% over the year-to-date period against the Zacks Computer - Software industry’s gain of +34.3%, but have handily outperformed the broader market's +13.7% gain. The company is benefitting from consistent execution across renewal sales motions, including strong recapture rates and slow yet steady growth in Azure cloud platform amid accelerated global digital transformation.
Solid adoption of ChatGPT, the popular chatbot from OpenAI, remains a tailwind. Slow yet steady performance of Office 365 and Dynamics is aiding user growth thereby driving the top-line. Strength in Marketing Solutions and steady performance in Talent Solutions is driving LinkedIn revenues boosted by recovery in advertising and job market.
However, a slowdown in its cloud business and declining videogame sales are overhangs. Decrease in demand for Xbox content and services and increasing spend on Azure enhancements amid stiff competition in the cloud space remains a concern.
(You can read the full research report on Microsoft here >>>)
Shares of UnitedHealth have gained +5.9% over the past six months against the Zacks Medical - HMOs industry’s gain of +7%. The company’s top line remains well-poised for growth on the back of a strong market position, new deals, renewed agreements and expansion of service offerings.
UnitedHealth’s solid health services segment provides diversification benefits. The Government business remains well-poised for growth. A sturdy balance sheet enables business investments and prudent deployment of capital via share repurchases and dividends.
However, membership in its global business continues to decline. High operating costs are hurting margins. As such, the stock warrants a cautious stance.
(You can read the full research report on UnitedHealth here >>>)
Shares of HSBC have outperformed the Zacks Banks - Foreign industry over the year-to-date period (+34.2% vs. +12.4%). A strong capital position, high interest rates, an extensive network and business restructuring initiatives will support the company’s prospects going forward.
HSBC is winding down retail operations in France, New Zealand and Canada and fully exiting Russia. These are expected to further help the bank to focus more on the Asia region. While efforts to improve market share in the region will aid financials, these will lead to a rise in expenses. Management expects expenses to increase 3% this year, and the acquisition of SVB UK will likely add another 1% to it.
The worsening macroeconomic operating backdrop is a major headwind. Nonetheless, the company’s strong brand value and widespread network will help it attract more clients. Its capital distributions remain decent.
(You can read the full research report on HSBC here >>>)
Other noteworthy reports we are featuring today include Philip Morris International Inc. (PM), International Business Machines Corporation (IBM) and Honeywell International Inc. (HON).
Director of Research
Sheraz Mian
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
Adoption of Cloud & Office 365 Strength Aid Microsoft (MSFT)
UnitedHealth (UNH) Strong on Top Line & Strong Cash Flows
Business Restructuring, Focus on Asia, Rates Aid HSBC (HSBC)
Featured Reports
Philip Morris (PM) Gains From Solid Pricing Amid Cost Woes
Per the Zacks analyst, Philip Morris has been benefiting from its solid pricing power amid cost inflation. Higher pricing variance aided the company's net revenues during the second quarter of 2023.
IBM Rides on Strong Demand for Hybrid Cloud and AI Solutions
Per the Zacks analyst, IBM is expected to gain from rising demand for its enterprise focused AI-powered platform Watsonx. Growing cloud adoption and strong free cash flow generation are tailwinds.
Aerospace Aids Honeywell (HON), Safety and Productivity Ails
The Zacks analyst is encouraged by strength in the Aerospace unit due to strong commercial aftermarket demand. However, weakness in the Safety and Productivity Solutions unit raises concerns.
Kinder Morgan (KMI) Banks on Stable Fee-Based Revenues
Kinder Morgan boasts stable fee-based revenues from its extensive natural gas pipeline network. Yet, significant debt exposure concerns the Zacks analyst.
Yum! Brands (YUM) Banks on Solid Comps Growth Amid High Cost
Per the Zacks analyst, notable comps growth driven by enhanced digital and unit expansion initiatives aid YUM! Brands. However, high costs and challenging macro environment hurt growth prospects.
Campbell Soup's (CPB) Top Line to Gain on Solid Snacks Unit
Per the Zacks analyst, Campbell Soup is set to keep gaining from focus on strengthening the growing snacks category. Sales from the unit rose 8% and formed 54.7% of top line in fiscal-fourth quarter.
Qinlock Sales Boost Deciphera (DCPH), Overdependence a Woe
Per the Zacks Analyst, Qinlock has been generating steady revenues for Deciphera, simultaneously working on its label expansion. However, the overdependence on Qinlock for cash flow remains a woe.
New Upgrades
Arch Capital (ACGL) Set to Grow on Solid Premium Growth
Per the Zacks analyst, Arch Capital is set to grow on solid Insurance and Reinsurance business driving improvement in premium growth which is backed by diverse product & service portfolio.
Penumbra (PEN) Rides on Solid Vascular Sales, Global Growth
Penumbra's Vascular growth globally is a major positive. Per the Zacks analyst, differentiated technologies of Lightning Flash and Lightning Bolt 7 leading to strong patient outcomes is a key driver.
E-commerce & Fleet Growth Aid Air Transport Services (ATSG)
The Zacks analyst is impressed by Air Transport Services' e-commerce growth even in the post-pandemic scenario. Also, its fleet modernization techniques are tailwinds.
New Downgrades
Component Shortage, Forex Risk May Hurt SolarEdge (SEDG)
Per the Zacks analyst, components shortages in the automotive industry caused delays in orders for SolarEdge's powertrain units in recent past. The stock also faces foreign currency exchange risk.
Paramount Global (PARA) Hurt By Dull Media Advertising Revenues
Per the Zacks analyst, sluggish media advertising revenues and declining domestic affiliate revenues are major headwinds for Paramount Global.
UMB Financial (UMBF) Hurt by Higher Expenses, Loan Concentration
Per the Zacks analyst, an increase in non-interest expenses, intense competition and high exposure to commercial loans can be risky for UMB Financial, amid uncertain macroeconomic conditions.
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
Microsoft Corporation (MSFT) : Free Stock Analysis Report
UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
Honeywell International Inc. (HON) : Free Stock Analysis Report
Philip Morris International Inc. (PM) : Free Stock Analysis Report
HSBC Holdings plc (HSBC) : Free Stock Analysis Report
