Today's Must Read
Broadcom (AVGO) Rides on Portfolio Strength & Acquisitions
CVS Health (CVS) Hopeful About Aetna Synergy, RFP View Weak
Tuesday, December 11, 2018
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), Broadcom (AVGO) and CVS Health (CVS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
UnitedHealth’s shares have outperformed the Zacks Medical Insurance industry's rally year to date (up +20.9% vs. +20.5%). The Zacks analyst thinks the company's performance is being backed by higher revenues and strength in both segments — UnitedHealthcare and Optum — plus membership growth.
The company's robust Government business is also driving long-term growth. Its international business and strong capital position are other positives. The company’s raised earnings guidance for 2018 should instill optimism among its investors. However, the company is seeing membership declines in Commercial segment.
Shares of Broadcom have underperformed the Zacks Electronics - Semiconductors industry over the past year, losing -7.5% vs. a -5.8% decline. Broadcom reported stellar fourth-quarter results and provided an encouraging fiscal 2019 outlook.
The Zacks analyst thinks the company is benefiting from strong demand for its wireless solutions and expanding product portfolio, which makes it well-positioned to address the needs of rapidly growing technologies like IoT and 5G. Strong ties with leading OEMs across multiple target markets will help the company to gain key insights into the requirements of customers.
Broadcom is a leading player in the semiconductor market based on its multiple target markets, accretive acquisitions and strong cash flow. Nevertheless, the company faces intensifying competition and integration risks due to frequent acquisitions. The company’s leveraged balance sheet and customer concentration continue to be headwinds.
CVS Health’s shares have underperformed the Zacks Retail Pharmacies and Drug Stores industry in the past six months, gaining +10.5% versus +14.9%. On November 29, CVS Health completed the $70-billion consolidation of insurance-giant Aetna.
The culmination of this huge deal marks the creation of a new healthcare powerhouse, which combines CVS Health’s broad pharmacy business with Aetna’s giant insurance base. In this regard the Zacks analyst stresses that over the past few quarters, the company has consistently demonstrated strong Pharmacy Services performance, benefiting from the upside in the specialty services.
Also, Retail/LTC comparisons are encouraging of late. Strong 2019 PBM selling season is another upside. On the flip side, the company fears it will witness fewer RFP (Requests for Proposals) opportunities in the market than what it has seen over the past few years. According to CVS Health, Omnicare business performance should continue to remain soft through the second-half of 2018.
Other noteworthy reports we are featuring today include ConocoPhillips (COP), FedEx (FDX) and Oracle (ORCL).
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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>>>