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Research Daily

Sheraz Mian

Top Analyst Reports for Microsoft, UnitedHealth & HSBC


Trades from $3

Monday, September 25, 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 Microsoft Corporation (MSFT), UnitedHealth Group Incorporated (UNH) and HSBC Holdings plc (HSBC). 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 >>>

Microsoft shares have gained +33.1% over the year-to-date period against the Zacks Computer - Software industry’s gain of +34.3%, but have handily outperformed the broader market's +13.7% gain. The company is benefitting from consistent execution across renewal sales motions, including strong recapture rates and slow yet steady growth in Azure cloud platform amid accelerated global digital transformation.

Solid adoption of ChatGPT, the popular chatbot from OpenAI, remains a tailwind. Slow yet steady performance of Office 365 and Dynamics is aiding user growth thereby driving the top-line. Strength in Marketing Solutions and steady performance in Talent Solutions is driving LinkedIn revenues boosted by recovery in advertising and job market.

However, a slowdown in its cloud business and declining videogame sales are overhangs. Decrease in demand for Xbox content and services and increasing spend on Azure enhancements amid stiff competition in the cloud space remains a concern.

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

Shares of UnitedHealth have gained +5.9% over the past six months against the Zacks Medical - HMOs industry’s gain of +7%. The company’s top line remains well-poised for growth on the back of a strong market position, new deals, renewed agreements and expansion of service offerings.

UnitedHealth’s solid health services segment provides diversification benefits. The Government business remains well-poised for growth. A sturdy balance sheet enables business investments and prudent deployment of capital via share repurchases and dividends.

However, membership in its global business continues to decline. High operating costs are hurting margins. As such, the stock warrants a cautious stance.

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

Shares of HSBC have outperformed the Zacks Banks - Foreign industry over the year-to-date period (+34.2% vs. +12.4%). A strong capital position, high interest rates, an extensive network and business restructuring initiatives will support the company’s prospects going forward.

HSBC is winding down retail operations in France, New Zealand and Canada and fully exiting Russia. These are expected to further help the bank to focus more on the Asia region. While efforts to improve market share in the region will aid financials, these will lead to a rise in expenses. Management expects expenses to increase 3% this year, and the acquisition of SVB UK will likely add another 1% to it.

The worsening macroeconomic operating backdrop is a major headwind. Nonetheless, the company’s strong brand value and widespread network will help it attract more clients. Its capital distributions remain decent.

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

Other noteworthy reports we are featuring today include Philip Morris International Inc. (PM), International Business Machines Corporation (IBM) and Honeywell International Inc. (HON).

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>>>

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