Thursday, January 7, 2021
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 (UNH), Netflix (NFLX) and Caterpillar (CAT). 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 Insurance industry over the past year (+21.4% vs. +11.2%). The Zacks analyst believes that the company’s top line has benefited significantly from new deals, renewed agreements and expansion of service offerings. Its numerous acquisitions bode well for its inorganic growth profile.
Expansion of the company’s health services segment provides significant diversification benefits. UnitedHealth remains well poised to benefit from its government business, comprising both Medicaid and Medicare Advantage.
A solid balance sheet and consistent cash flow generation not only encourage investments in business but also add shareholder value. However, the company is witnessing a slowdown in its international operations. Increased joblessness stemming from the COVID-19 induced volatilities might hurt Commercial membership.
(You can read the full research report on UnitedHealth here >>>)
Shares of Netflix have lost -0.4% in the last six months against the Zacks Broadcast Radio and Television industry’s gain of +18.2%. The Zacks analyst believes that Netflix is dominating the streaming space, on the back of heavy investments in the production and distribution of localized, foreign-language content.
Higher number of originals is expected to aid user base growth in 2021. Moreover, the launch of low-priced mobile plans in India, Indonesia, Malaysia, Philippines and Thailand is expanding Netflix’s subscriber base in Asia Pacific.
However, the absence of new season of popular show Stranger Things is likely to affect subscriber growth in the fourth quarter of 2020. Additionally, rising competition from Apple, Amazon prime video, HBO Max, Disney+, Peacock and TikTok is a headwind. Netflix’s leveraged balance sheet and higher streaming obligation is a concern.
(You can read the full research report on Netflix here >>>)
Caterpillar shares have gained +23.7% over the past three months against the Zacks Construction and Mining industry’s rise of +24.4%. The Zacks analyst believes that a weak backlog, lowering of inventory by dealers and weakness in non-residential construction will impact the company’s results in 2020. Its cost-reduction efforts will sustain margins in this scenario.
Further, a recovering manufacturing sector, resumption of spending at miners, improved North American residential construction and strong construction demand in China hold promise.
A robust liquidity position, investments in expanded offerings, and services and digital initiatives will also fuel growth. The earnings estimates for Caterpillar’s current fiscal year have undergone positive revisions lately.
(You can read the full research report on Caterpillar here >>>)
Other noteworthy reports we are featuring today include General Electric (GE), American Express (AXP) and GlaxoSmithKline (GSK).
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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
Solid Top Line & Strong Cash Flows Drive UnitedHealth (UNH)
Robust Content Aids Netflix (NFLX) Amid Stiff Competition
Caterpillar (CAT) Bets on Cost Control Amid Weak Demand
Restructuring Aids General Electric (GE), Power Segment Ails
Per the Zacks analyst, General Electric’s business portfolio-restructuring program continues to lend momentum to it.
Decline in Expenses to Aid American Express’ (AXP) Margins
Per the Zacks analyst, a halt in advertising and a slowdown in product launches will lower marketing costs and drive margins.
Glaxo’s (GSK) Cancer Pipeline Grows Amid Rising Competition
The Zacks analyst is encouraged by the company’s initiatives to focus on its oncology pipeline.
Strategic Initiatives Aid Anthem (ANTM), Rising Costs Hurt
Per the Zacks analyst, a number of acquisitions and collaborations have helped it enhance its capabilities and boost its Medicare business.
Solid Balance Sheet Supports BNY Mellon (BK) Amid Low Rates
Per the Zacks analyst, a solid balance sheet and efforts to improve efficiency through cost control will aid BNY Mellon.
Business Expansion to Drive AutoZone (AZO) Amid Cost Woes
While business expansion efforts through new store openings and digital ramp-up are likely to aid Autozone, rising operating expenses are denting near-term profits, per the Zacks analyst.
Vulcan’s (VMC) Buyout Drive Strong, Inclement Weather Hurts
Per the Zacks analyst, sustained growth in the U.S. residential market and bolt-on acquisitions bode well for Vulcan Materials.
Growing Healthcare and Packaging Business Drives Jabil (JBL)
Per the Zacks analyst, growing demand for affordable healthcare and dependable consumer packaging is driving the top-line growth for Jabil.
Sturdy Comps Run to Fuel BJ’s Wholesale Club (BJ) Sales
Per the Zacks analyst, BJ’s Wholesale focus on simplifying assortments and expanding into high-demand categories have been driving comparable club sales growth.
Solid Adoption of Vantage Drives Teradata’s (TDC) Progress
Per the Zacks analyst, Teradata is benefiting from strong demand for its Vantage solution that is now available on Amazon Web Services, Microsoft Azure, and Google Cloud.
Cash Flow Crunch & High Debt to Ail Toyota (TM)
Rising debt levels along with ebbing cash flows thanks to soaring R&D expenses and coronavirus-led lost revenues have made the Zacks analyst wary of the stock.
Sluggish Travel Trends & Weak trivago Hurt Expedia (EXPE)
Per the Zacks analyst, Expedia is suffering from softness in global travel trends owing to coronavirus headwinds and weak-performing trivago.
Rising Net Outflows, Expenses Hurt Artisan Partners (APAM)
Per the Zacks analyst, rising net outflows hurt Artisan Partners’ assets under management growth. Also, rising costs due to investments in technology might keep the bottom line under pressure.
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UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
GlaxoSmithKline plc (GSK) : Free Stock Analysis Report
General Electric Company (GE) : Free Stock Analysis Report
Caterpillar Inc. (CAT) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
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