Friday, June 30, 2023

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 Linde plc (LIN), Elevance Health, Inc. (ELV) and Lam Research Corporation (LRCX). 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 >>>

Linde shares have outperformed the Zacks Chemical - Specialty industry over the past year (+34.9% vs. +16.2%) on the back of favorable underlying business momentum.  The company’s primary products in industrial gases include oxygen, which is used as life support in hospitals.

Linde has long-term contracts with on-site customers backed by minimum purchase requirements, thereby securing stable cashflows. In the profitable industrial gas market, the merger of Praxair and Linde has created an efficient player with considerable size advantages. For 2023, Linde increased adjusted EPS guidance representing 9%-13% year-over-year growth.

However, declining free cashflow is a concern, reflecting weakness in operating activities. Moreover, the company is extremely vulnerable to uncertainty associated with the slowdown of economic growth, as this could hurt demand for its industrial gases

(You can read the full research report on Linde here >>>)

Shares of Elevance Health have declined -9.4% over the past year against the Zacks Medical Services industry’s decline of -14.3%. The company is witnessing escalating expenses which continue to put pressure on margins. Also, its declining cash flows can be concerning. ELV's balance sheet with a rising debt level can affect financial flexibility. As such, the stock warrants a cautious stance.

Nevertheless, Elevance Health's improving top line can be attributed to premium rate increases and higher memberships. We expect operating revenues to grow 5.4% year over year in 2023. Acquisitions and collaborations have enabled the company to strengthen its business portfolio.

Its well-performing Medicare and Medicaid businesses, coupled with several contract wins, are expected to drive its membership going ahead. The company's growing Carelon business is a major positive. ELV utilizes excess capital to boost shareholder value.

(You can read the full research report on Elevance Health here >>>)

Shares of Lam Research have outperformed the Zacks Semiconductor Equipment - Wafer Fabrication industry over the past six months (+53.3% vs. +41.0%). The company is benefiting from strength across systems business. Also, strengthening customer support business remains a major positive. Rising NAND requirement in accelerating 5G migration, video, and new game consoles is driving the top-line growth.

Strong momentum in foundry and logic segment owing to the growing traction among etch and deposition technologies, is a major positive. Additionally, strength in both ALD metals and dielectrics deposition solutions is contributing well. Advanced packaging technology inflections are other positives.

However, growing supply chain constraints remain concerns. Imposition of export curbs on China’s chip companies is a headwind. Also, cyclicality and adverse foreign currency fluctuations are overhangs.

(You can read the full research report on Lam Research here >>>)

Other noteworthy reports we are featuring today include KLA Corporation (KLAC), Workday, Inc. (WDAY) and Johnson Controls International plc (JCI).

Director of Research

Sheraz Mian

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>>>