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Top Stock Reports for Alphabet, UnitedHealth & Costco

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Monday, May 23, 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 Alphabet Inc. (GOOGL), UnitedHealth Group Incorporated (UNH), and Costco Wholesale Corporation (COST). 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 >>>

Shares of Alphabet have lagged the broader market this year (-21% vs. -16%), but have held up better than the Tech sector (-21% vs. -26.7%). The stock's weakness is a reflection of sentiment shift on faster-growing stocks in a rising rate environment. But the company is well positioned in the long run, given its search dominance, lucrative advertising business and a host of next generation investments. 

The Zacks analyst believes that Alphabet's robust cloud division continues to be the key catalyst. Moreover, expanding data centres will continue to bolster its presence in the cloud space. Further, major updates in its search segment are enhancing the search results. Moreover, Google’s mobile search is constantly gaining solid traction. Also, strong focus on AI techniques and the home automation space should aid business growth. However, growing litigation issues and the Russia-Ukraine war remain concerns.

 

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

Shares of UnitedHealth have outperformed the Zacks Medical - HMOs industry over the past year (+18.2% vs. +16.2%) 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.

UnitedHealth reported strong first-quarter 2022 results thanks to growth in its business segments. A sturdy balance sheet enables investments and prudent capital deployment through share buybacks and dividends. However, softness in commercial business due to the COVID-induced volatilities persists. Also, rising operating costs are hurting its profits.

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

Shares of Costco have outperformed the Zacks Retail - Discount Stores industry over the past year (+8.6% vs. -11.0%). The Zacks analyst believes that being a consumer defensive stock, Costco has been surviving the market turmoil pretty well. The discount retailer's key strengths are strategic investments, a customer-centric approach, merchandise initiatives, and an emphasis on membership growth. These factors have been helping it register impressive sales and earnings numbers.

A favorable product mix, steady store traffic, pricing power and strong liquidity position should help Costco keep outperforming. While it is trading at a premium to its peers, the Zacks analyst believes that the company’s long-term growth prospects should help the stock see a solid upside.

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

Other noteworthy reports we are featuring today include Cisco Systems, Inc. (CSCO), Wells Fargo & Company (WFC), and Sanofi (SNY).

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

Alphabet (GOOGL) Benefits From Cloud & Search Initiatives

UnitedHealth (UNH) to Ride on UnitedHealthcare & Optum Units

Decent Comparable Sales Run to Fuel Costco's (COST) Top Line

Featured Reports

Cisco (CSCO) Benefits From Strong Security Products Adoption
Per Zacks analyst, Cisco is benefiting from a rapidly growing security market driven by robust adoption of identity and access, advanced threat and unified threat management security solutions.

Cost Control Aids Wells Fargo (WFC) Amid Declining Revenues
Per the Zacks analyst, Wells Fargo's cost-saving measures like branch closures and headcount reduction will help offset the falling revenue trends resulting from the mortgage banking income headwinds.

Sanofi (SNY) Boasts a Solid & Expanding Pipeline
The Zacks analyst believes Sanofi's R&D pipeline is strong. It has launched several new drugs in the past couple of years and is expanding its pipeline through M&A deals.

Strategic Acquisitions Aid Schwab (SCHW) Amid Lower Rates
Per the Zacks analyst, Schwab's inorganic growth initiatives and other revenue diversification efforts will aid profits. Despite the expected rate hikes, relatively low rates might hurt the top line.

America Movil (AMX) Benefits from Increasing Subscriber Base
Per the Zacks analyst, America Movil's performance is gaining from growing subscriber base. However, intense competition from U.S. telecom behemoth AT&T and high debt load are major concerns.

Strategic Alliances Aid Walgreens (WBA) Amid Stiff Rivalry
The Zacks analyst is upbeat about Walgreens' recent collaborations with VillageMD and Vitamin Angels. Yet, increasing competition from traditional drug store retailers continues to pose challenges.

FLEETCOR (FLT) Rides on Buyouts Amid Higher Interest Expense
The Zacks Analyst likes FLEETCOR's buyout strategy to expand customer base and diversify its service offerings across industries. Higher interest expense is likely to keep the bottom line under pressu

New Upgrades

Multi-basin Portfolio, Low Cost Asset Aid Murphy Oil (MUR)
Per the Zacks analyst Murphy Oil's maintenance of a multi-basin portfolio boosts production and low cost operating assets in North America will drive operation.

PBF Energy (PBF) Continues to Gain From Refining Business
Per the Zacks analyst, PBF Energy's refining business is likely to benefit from the rising demand for refined petroleum products.

Kronos Worldwide (KRO) Gains on Higher TiO2 Demand, Prices
Per the Zacks analyst, higher titanium dioxide (TiO2) demand will drive the company's sales volumes. Higher average TiO2 selling prices will also support its margins.n

New Downgrades

Boeing 787 Issue, Pandemic's Impact to Hurt Triumph (TGI)
Per the Zacks analyst, lower production rate and paused delivery for Boeing's 787 jets may impact Triumph Group's results. Also, supply-chain issue arising from the COVID-19 might hurt the stock.

Supply Chain Woes & Higher Costs Dent Gap's (GPS) Margins
Per the Zacks analyst, higher air freight due to supply-chain woes, dented Gap's margins in Q4. Elevated costs for marketing and technology, as well as compensation and fulfilment are also deterrents.

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.


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
 
Wells Fargo & Company (WFC) : Free Stock Analysis Report
 
Sanofi (SNY) : Free Stock Analysis Report
 
UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
 
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
 
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
 
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
 
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Zacks Investment Research

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