Today's Must Read
UnitedHealth (UNH) to Ride on UnitedHealthcare, Optum Units
Acquisitions, Trading Focus Aid Schwab (SCHW) Amid Low Rates
Friday, January 7, 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 Microsoft Corporation (MSFT), UnitedHealth Group Incorporated (UNH), and The Charles Schwab Corporation (SCHW). 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 Microsoft have outperformed the S&P 500 over the past year (+44.1% vs. +24.9%), with the company benefiting from strength in its Azure cloud platform as well as an accelerated global digital transformation.
Continuation of remote work and mainstream adoption of the hybrid working model has been boosting Teams’ user growth. Microsoft has also been witnessing a surge in user base of its different applications including Microsoft 365 suite, Dynamics and Power Platform. Supply chain disruptions, increasing costs due to Azure enhancements and stiff competition in the cloud space are likely to dent margins, though.
UnitedHealth shares have gained +15.3% over the past three months against the Zacks Medical Insurance industry’s gain of +13.2%. The Zacks analyst believes that UnitedHealth has been witnessing strong growth across its Optum and UnitedHealthcare segments, which have, in turn, been driving revenues.
This momentum is likely to continue, in the quarters ahead, on the back of a strong market position, new deals, renewed agreements and expansion of service offerings. UNH's government business also remains well-poised for growth. The international business is expected to bounce back in terms of membership figures. Softness in commercial business due to the ongoing pandemic and rising operating expenses remain as major concerns, though.
Shares of Schwab have gained +33.8% in the last six months against the Zacks Investment Banking industry’s gain of +11.4%. The Zacks analyst believes that Schwab’s inorganic growth efforts and initiatives to augment trading revenues will keep boosting profitability.
Strategic acquisitions have not only established Schwab as a leading brokerage player, but will also be accretive to earnings. Offering commission-free trading has also led to a rise in client assets and brokerage accounts, thereby improving trading revenues. Lingering near-zero interest rates, with no chance of a hike in the near term and persistently increasing operating expenses, however, are some of the major headwinds.
Other noteworthy reports we are featuring today include NVIDIA Corporation (NVDA), Citigroup Inc. (C) and Diageo plc (DEO).
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>>>