Today's Must Read
High Speed Internet Subscriber Gain Benefits Comcast (CMCSA)
ExxonMobil (XOM) Banks on Guyana Discoveries, Refining Hurts
Tuesday, August 4, 2020
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), Comcast (CMCSA) and Exxon Mobil (XOM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
UnitedHealth shares have outperformed the Zacks Medical Insurance industry over the past year (+23.9% vs. +13.1%). The Zacks analyst believes that the company has been benefiting from higher segmental contributions, which helped it counter the coronavirus-led fund crunch. Its numerous acquisitions bolstered its inorganic growth profile.
Its solid balance sheet and consistent cash flow generation encourage investment in business. By retaining its 2020 earnings guidance, the company restores investor confidence. However, it is witnessing a slowdown in its international operations. Commercial membership may also see attrition due to increased joblessness.
UnitedHealth’s earnings of $7.12 per share beat estimates by 37.45% and also soared 98% year over year. Strong earnings were driven by an unprecedented, temporary deferral of care in the company’s risk-based businesses.
Shares of Comcast have lost -3.8% over the past six months against the Zacks Cable Television industry’s rise of +4.2%. The Zacks analyst believes that weakness in film business is a headwind for Comcast. Moreover, its balance sheet remains significantly leveraged, which is also a concern.
Comcast’s second-quarter 2020 results were driven by solid growth in high-speed Internet, Business Services and Wireless segments. However, the coronavirus outbreak adversely impacted advertising, the theme park, film and Sky businesses. The fall in advertising revenues reflected reduced advertiser spending due to postponement of sporting events and continued ratings decline.
Further, Comcast persistently suffered video-subscriber attrition due to cord-cutting. Moreover, its Universal Studios Hollywood theme park remains closed. Further, Comcast expects Sky EBITDA for the third and fourth quarters on a combined basis to decline roughly 60% year over year.
Exxon Mobil shares have gained +57.8% over the past three months against the Zacks Integrated International Oil industry’s rise of +64.4%. The Zacks analyst believes that major discoveries in the Stabroek Block have enhanced prospects for ExxonMobil's upstream businesses.
ExxonMobil’s bellwether status in the energy space, optimal integrated capital structure that has historically produced industry-leading returns and management’s track record of capex discipline across the commodity price cycle make it a relatively lower-risk energy sector play. Notably, the company estimates gross recoverable resource of more than 8 billion oil-equivalent barrels from offshore Guyana discoveries.
The integrated firm also has a strong balance sheet with significant low debt exposure. However, ExxonMobil recently reported weak second-quarter results owing to coronavirus-induced weak commodity prices and reduced industry refining margins in U.S. & non-U.S. operations. Also, the company expects scheduled maintenance activities to continue to hurt downstream and chemical segments in the September quarter of 2020.
Other noteworthy reports we are featuring today include Microsoft (MSFT), Accenture (ACN) and Charter Communications (CHTR).
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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>>>