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The Zacks Analyst Blog Highlights Coca-Cola, Home Depot, Merck and JPMorgan Chase
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For Immediate Release
Chicago, IL – July 11, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: The Coca-Cola Co. (KO - Free Report) , The Home Depot Inc. (HD - Free Report) , Merck & Co. Inc. (MRK - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Buy These 5 Blue-Chip Stocks to Strengthen Your Portfolio
Wall Street has concluded its worst first half in more than 50 years. The tremors of record-high inflation and its aftershock in the form of an extremely hawkish Fed have shaken investors' confidence to its nadir. Concerns regarding slowing economic growth and a possible recession have resulted in severe volatility.
Year to date, the three major large-cap indexes have suffered stiff losses. Despite market mayhem, the Dow — popularly known as the blue-chip index — has suffered the least. Here are four Dow stocks with a favorable Zacks Rank that should provide good returns in the near term. These are — The Coca-Cola Co., The Home Depot Inc., Merck & Co. Inc. and JPMorgan Chase & Co..
Dow Suffers the Least
Year to date, the three large-cap-centric stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have tumbled 13.6%, 18.2% and 25.7% respectively. The Nasdaq Composite entered a bear market in March and the S&P 500 in June. However, the Dow managed to stay out of the bear territory, although the index is in the correction zone.
The primary concern of the U.S. economy is soaring inflation which is currently at its 40-year high. In order to combat mounting inflation, the Fed has already hiked interest rate sharply and will continue to do so in the near future.
A higher interest rate is detrimental to growth stocks, especially technology stocks. In contrast to the Nasdaq Composite and the S&P 500 indexes, the 30-stock Dow is more inclined to cyclical stocks rather than growth stocks. Therefore, the index has suffered the least.
Wall Street May Gain Some Pace in 2H 2022
A high dose of interest rate therapy and extremely tight monetary control by the Fed to combat the record-high inflation might show positive signals. The Department of Commerce reported that personal spending — the largest component of the U.S. GDP — adjusted for inflation fell 0.4% in May, a sharp decline from the 0.3% gain in April.
Other major economic data for May and June such as ISM manufacturing and services indexes, retail sales and industrial production dropped significantly. The housing market — one of the booming sectors during the pandemic — has been declining precipitously since April.
The U.S. economy is cooling as desired by the Fed. However, recently, several major investment bankers and portfolio managers have said that the U.S. economy may not fall into a recession anytime soon despite slowing GDP growth. Even if there is a recession, the effect may be mild.
Our Top Picks
We have narrowed our search to four Dow stocks. These stocks have solid potential for the rest of 2022 and have seen positive earnings estimate revisions in the last 90 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Coca-Cola has benefited from its strategic transformation and ongoing recovery around the world. Strength across the majority of markets, investments in marketplace, recovery in certain markets as well as the cycling of last year's pandemic-led impacts aided volumes. KO retained its upbeat 2022 view. Coca-Cola is poised to gain from innovations and accelerating digital investments.
Coca-Cola has an expected earnings growth rate of 6.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 20.50.8% over the last 90 days. KO has a current dividend yield of 2.8%.
Merck has been benefiting from strong sales of Keytruda, Lynparza and Bridion. With continued label expansion into new indications & early-stage settings, Keytruda is expected to remain a key top-line driver of MRK.
Animal health and vaccine products are the core growth drivers. Merck's new COVID oral antiviral pill, Lagevrio will be a key top-line driver in 2022. MRK boasts a strong cancer pipeline, including Keytruda, which should help drive long-term growth.
Merck has an expected earnings growth rate of 21.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 30 days. MRK has a current dividend yield of 3%.
The Home Depot has gained from strong demand for home-improvement projects, robust housing market trends and the ongoing investments. HD also benefited from continued strength in both Pro and DIY categories as well as digital momentum.
The Home Depot's interconnected retail strategy and underlying technology infrastructure have helped to consistently boost web traffic for the past few quarters, aiding digital sales.
The Home Depot has an expected earnings growth rate of 6.1% for the current year (ending January 2023). The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the last 30 days. HD has a current dividend yield of 2.7%.
JPMorgan Chase will benefit from higher interest rates and rising loan demand. Opening new branches, strategic acquisitions/investments, global expansion and digitization, and a decent investment banking pipeline are likely to keep aiding JPM's top line. Also, JPMorgan Chase's steady capital deployments look sustainable and would enhance shareholder value.
JPMorgan Chase has an expected earnings growth rate of 14.4% for next year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 7 days. JPM has a current dividend yield of 3.6%.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Coca-Cola, Home Depot, Merck and JPMorgan Chase
For Immediate Release
Chicago, IL – July 11, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: The Coca-Cola Co. (KO - Free Report) , The Home Depot Inc. (HD - Free Report) , Merck & Co. Inc. (MRK - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Buy These 5 Blue-Chip Stocks to Strengthen Your Portfolio
Wall Street has concluded its worst first half in more than 50 years. The tremors of record-high inflation and its aftershock in the form of an extremely hawkish Fed have shaken investors' confidence to its nadir. Concerns regarding slowing economic growth and a possible recession have resulted in severe volatility.
Year to date, the three major large-cap indexes have suffered stiff losses. Despite market mayhem, the Dow — popularly known as the blue-chip index — has suffered the least. Here are four Dow stocks with a favorable Zacks Rank that should provide good returns in the near term. These are — The Coca-Cola Co., The Home Depot Inc., Merck & Co. Inc. and JPMorgan Chase & Co..
Dow Suffers the Least
Year to date, the three large-cap-centric stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have tumbled 13.6%, 18.2% and 25.7% respectively. The Nasdaq Composite entered a bear market in March and the S&P 500 in June. However, the Dow managed to stay out of the bear territory, although the index is in the correction zone.
The primary concern of the U.S. economy is soaring inflation which is currently at its 40-year high. In order to combat mounting inflation, the Fed has already hiked interest rate sharply and will continue to do so in the near future.
A higher interest rate is detrimental to growth stocks, especially technology stocks. In contrast to the Nasdaq Composite and the S&P 500 indexes, the 30-stock Dow is more inclined to cyclical stocks rather than growth stocks. Therefore, the index has suffered the least.
Wall Street May Gain Some Pace in 2H 2022
A high dose of interest rate therapy and extremely tight monetary control by the Fed to combat the record-high inflation might show positive signals. The Department of Commerce reported that personal spending — the largest component of the U.S. GDP — adjusted for inflation fell 0.4% in May, a sharp decline from the 0.3% gain in April.
Other major economic data for May and June such as ISM manufacturing and services indexes, retail sales and industrial production dropped significantly. The housing market — one of the booming sectors during the pandemic — has been declining precipitously since April.
The U.S. economy is cooling as desired by the Fed. However, recently, several major investment bankers and portfolio managers have said that the U.S. economy may not fall into a recession anytime soon despite slowing GDP growth. Even if there is a recession, the effect may be mild.
Our Top Picks
We have narrowed our search to four Dow stocks. These stocks have solid potential for the rest of 2022 and have seen positive earnings estimate revisions in the last 90 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Coca-Cola has benefited from its strategic transformation and ongoing recovery around the world. Strength across the majority of markets, investments in marketplace, recovery in certain markets as well as the cycling of last year's pandemic-led impacts aided volumes. KO retained its upbeat 2022 view. Coca-Cola is poised to gain from innovations and accelerating digital investments.
Coca-Cola has an expected earnings growth rate of 6.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 20.50.8% over the last 90 days. KO has a current dividend yield of 2.8%.
Merck has been benefiting from strong sales of Keytruda, Lynparza and Bridion. With continued label expansion into new indications & early-stage settings, Keytruda is expected to remain a key top-line driver of MRK.
Animal health and vaccine products are the core growth drivers. Merck's new COVID oral antiviral pill, Lagevrio will be a key top-line driver in 2022. MRK boasts a strong cancer pipeline, including Keytruda, which should help drive long-term growth.
Merck has an expected earnings growth rate of 21.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 30 days. MRK has a current dividend yield of 3%.
The Home Depot has gained from strong demand for home-improvement projects, robust housing market trends and the ongoing investments. HD also benefited from continued strength in both Pro and DIY categories as well as digital momentum.
The Home Depot's interconnected retail strategy and underlying technology infrastructure have helped to consistently boost web traffic for the past few quarters, aiding digital sales.
The Home Depot has an expected earnings growth rate of 6.1% for the current year (ending January 2023). The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the last 30 days. HD has a current dividend yield of 2.7%.
JPMorgan Chase will benefit from higher interest rates and rising loan demand. Opening new branches, strategic acquisitions/investments, global expansion and digitization, and a decent investment banking pipeline are likely to keep aiding JPM's top line. Also, JPMorgan Chase's steady capital deployments look sustainable and would enhance shareholder value.
JPMorgan Chase has an expected earnings growth rate of 14.4% for next year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 7 days. JPM has a current dividend yield of 3.6%.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.