Today's Must Read
J&J (JNJ) Boasts a Solid Pipeline
Chevron (CVX) to Gain from Massive Permian Acreage
Monday, September 26, 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 UnitedHealth Group Incorporated (UNH), Johnson & Johnson (JNJ) and Chevron Corporation (CVX). 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 - HMOs industry (+25.3% vs. +24.6%) and the S&P 500 (+25.3% vs. -18.1%) index over the past year . The Zacks analyst believes that the company’s top line has been growing and the momentum should continue in the years ahead on the back of a strong market position and an attractive core business that continues to be driven by new deals, renewed agreements and expansion of service offerings.
UNH's Government business remains well-poised for growth. A sturdy balance sheet enables investments and prudent capital deployment through share buybacks and dividends. However, softness in commercial business due to COVID-induced volatilities persists. Also, the rising operating costs are hurting the company's bottom line.
Johnson & Johnson’s shares have advanced +2.2% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +6.0%. The Zacks analyst believes that J&J’s diversification makes it relatively resilient amid macroeconomic turmoil. Its Pharma unit is performing at above-market levels, supported by its blockbuster drugs, Darzalex and Stelara, and contribution from newer drugs, Erleada and Tremfya. Sales in the MedTech unit are recovering in 2022 and the company is focusing on growing this business through new products. J&J is making rapid progress with its pipeline and line extensions.
However, sales in the Consumer and MedTech units are being hurt by inflationary pressure. Headwinds like generic competition and pricing pressure continue. Though J&J has taken meaningful steps to resolve its talc and opioid litigation, they continue to remain an overhang on the stock.
Chevron shares have outperformed the Zacks Oil and Gas - Integrated – International industry over the past year (+40.6% vs. +25.6%). The Zacks analyst believes that the company is considered one of the best-placed global integrated oil firms to achieve sustainable production ramp-up. America’s No. 2 energy company’s existing project pipeline is among the best in the industry, thanks to its premier position in the lucrative Permian Basin.
However, Chevron was not immune to the commodity price crash of 2020, forcing it to cut spending substantially. The company’s high oil price sensitivity is a concern too. Moreover, the supermajor’s 10-year reserve replacement ratio of 100% is indicative of its inability to replace the amount of oil and gas produced.
Other noteworthy reports we are featuring today include NextEra Energy, Inc. (NEE), The Home Depot, Inc. (HD), and AT&T Inc. (T).
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>>>