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Top Analyst Reports for UnitedHealth, Chevron & AstraZeneca

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·6-min read
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Friday, June 24, 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 Inc. (UNH), Chevron Corp. (CVX), and AstraZeneca PLC (AZN). 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 shares have outperformed the Zacks Medical - HMOs industry over the past year (+24.3% vs. +20.3%). 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.

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 >>>)

Chevron shares have outperformed the Zacks Oil and Gas - Integrated - International industry over the past year (+39.8% vs. +25.2%). The company is considered one of the best-placed global integrated oil firms to achieve sustainable production ramp-up. America’s No. 2 energy company’s existing project pipeline is among the best in the industry, thanks to its premier position in the lucrative Permian Basin.

However, Chevron was not immune to the commodity price crash of 2020, forcing it to cut spending substantially. The company’s high oil price sensitivity is a concern too. Moreover, the supermajor’s 10-year reserve replacement ratio of 100% is indicative of its inability to replace the amount of oil and gas produced. Finally, Chevron has been a laggard to jump into the net-zero bandwagon.

(You can read the full research report on Chevron here >>>)

AstraZeneca shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the year-to-date basis (+14.9% vs. +4.6%). The company’s new drugs, mainly cancer medicines, Lynparza, Tagrisso and Imfinzi should keep driving revenues.

Its pipeline is strong with several phase III data readouts lined up. AstraZeneca has also engaged in external acquisitions and strategic collaborations to boost its pipeline while investing in geographic areas of high growth like emerging markets. Cost-cutting efforts should drive earnings.

The Alexion buyout strengthens its immunology franchise, adding several drugs that can boost its top line. However, AstraZeneca’s diabetes franchise faces stiff competition while pricing pressure is hurting sales in the respiratory unit. Sales of some cancer medicines are being hurt due to COVID-19. Sales are slowing down in key market, China, due to pricing pressure.

(You can read the full research report on AstraZeneca here >>>)

Other noteworthy reports we are featuring today include SAP SE (SAP), BP p.l.c. (BP), and Bayer Aktiengesellschaft (BAYRY).

Mark Vickery
Senior Editor

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 (UNH) to Ride on UnitedHealthcare & Optum Units

Chevron (CVX) to Gain from Massive Permian Acreage

Cancer Drugs Aid AstraZeneca (AZN) Sales Amid China Impact

Featured Reports

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.

BP to Benefit From Renewable Energy Project in Australia
Per the Zacks analyst, BP is well-poised to gain from Australia's renewable energy project, which can be the world???s leading producer of green hydrogen. Yet, higher debt exposure is concerning.

Recent Drug Approvals Aid Bayer (BAYRY), Stiff Rivalry a Woe
Per the Zacks analyst, Bayer has undertaken several initiatives to strengthen its portfolio. However, competition from generic threats remains a concern.

U.S. Pharmaceutical Arm Aids McKesson (MCK), High Costs Ail
Per the Zacks analyst, solid prospects in the core U.S. Pharmaceutical and Specialty Solutions unit, fueled by market growth, continue to aid McKesson. But rise in corporate expenses raise concern.

Hilton (HLT) Banks on Unit Expansion Efforts, RevPAR Dismal
Per the Zacks analyst, Hilton is likely to benefit from its solid development pipeline and hotel conversion opportunities. However, lag in RevPAR from pre-pandemic levels is a concern.

Investments Aid Consolidated Edison (ED), COVID Impacts Woe
Per the Zacks analyst, investments tend to boost Consolidated Edison's long-term growth. Yet delay in collection of charges due to financial distress of customers led by Covid-19, might hurt the stock

Strategic Buyouts, Solid Balance Sheet Aids Extra Space (EXR)
Per the Zacks Analyst, Extra Space Storage is poised to gain from its high brand value, healthy demand and strategic acquisitions. Yet, a development boom in many markets might intensify competition.

New Upgrades

Strong Automotive End-Market Aids onsemi's (ON) Prospects
Per the Zacks analyst, onsemi benefits from strong demand for its solutions in the automotive end-market. Its fab-light strategy is expected to drive gross margin expansion.

Strong E-Commerce Demand Aids Packaging Corporation (PKG)
Per the Zacks analyst, Packaging Corporation will gain on robust packaging demand backed by rising e-commerce activities as well as for food, beverages, medicine and other consumer products.

GATX Rides on Improvement in Railcar Leasing Market
Per the Zacks analyst, recovery in railcar leasing market is aiding GATX's top line. Additionally, the company's efforts to reward its shareholders through dividends and buybacks are encouraging.

New Downgrades

Continued Weakness in China Ails V.F. Corp's (VFC) Top Line
Per the Zacks analyst, V.F. Corp's China business remains affected by COVID-related lockdowns, travel restrictions and consumer anxiety. It now predicts China business to be down almost 35% in Q1.

Supply-Chain Constraints Hurts Micron's (MU) Bit Shipments
Per the Zacks Analyst, supply constraints for certain integrated circuit components is expected to negatively impact Micron's bit shipments in the near term.

Supply Chain Issues, Macro Challenges Impact Bausch (BHC)
Per the Zacks analyst, Bausch's business is likely be impacted by ongoing challenges in the supply chain environment. The IPO for the eye care health business also didn't meet expectations.

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