Today's Must Read
Prudent Cost Control & Diversification Supports Goldman (GS)
Focus on Wealth Management Aids Morgan Stanley's (MS) Growth
Friday, October 20, 2017
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 (UNH), Goldman Sachs (GS) and Morgan Stanley (MS).These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-rated UnitedHealth’s shares have outperformed the Zacks Medical Insurance industry in the last six months (up +19.7% vs. +19.2%). UnitedHealth Group’s third-quarter earnings beat expectations and grew year over year.
The Zacks analyst likes the company’s robust Government business and continued strong performance at Optum. International business and strong capital position are its other positives. UnitedHealth has been witnessing an increase in membership for the past several years.
On the back of its impressive earnings in the first nine months, the company raised its 2017 guidance. It has reduced exposure to the troubled public exchange business. Though this move will shield it from losses in this business, premium revenues are likely to be affected. Charges related to the Penn Treaty are other causes of concern.
Shares of Buy-rated Goldman Sachs have gained 39.1% over the last one year, outperforming the +36.1% gain of the Zacks Investment Bank industry. Goldman Sachs has surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters.
Goldman’s third-quarter 2017 results surpassed expectations. Results reflected higher revenues on continued momentum in investment banking business, partially offset by lower fixed-income trading activities and elevated expenses.
Though several issues, including sluggish global economic growth and lower client activity levels, remain near-to-medium-term headwinds, the Zacks analyst thinks the company’s well-diversified business and its ability to capitalize on growth opportunities through strategic moves should continue to bolster the overall business.
Buy-rated Morgan Stanley’s shares have outperformed the Zacks Investment Bank industry, over the last six months (+20.3% vs. +15.3%). This performance was supported by the company’s impressive earnings surprise history. The company’s third-quarter 2017 results benefited from improvement in investment banking and stable equity trading income while slump in fixed income trading, fall in net interest income and higher in operating expenses were the undermining factors.
The Zacks analyst likes the company’s efforts to lower balance sheet risk and strengthen wealth management operations as well as its cost saving initiatives (Project Streamline) all of which should further support profitability. However, a continued fall in net interest income and overall trading woes are expected to hurt the company’s bottom-line growth in the near term.
Other noteworthy reports we are featuring today include U.S. Bancorp (USB), Texas Instruments (TXN) and Discover Financial (DFS).
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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>>>