Monday, May 20, 2024

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), Danaher Corporation (DHR) and Abbott Laboratories (ABT), as well as a micro-cap stock Ark Restaurants Corp. (ARKR). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 >>>

UnitedHealth shares have outperformed the Zacks Medical - HMOs industry over the past year (+10.8% vs. +10.6%). The company’s top line remains poised for growth on the back of a strong market position, new deals, renewed agreements and expansion of service offerings. The company’s solid health services segment provides diversification benefits.

The Government business remains well-poised for growth in the future. Adjusted net earnings per share are anticipated to be in the $27.5-$28.00 band in 2024, higher than the 2023 reported figure of $25.12. A sturdy balance sheet enables business investments and prudent deployment of capital via share repurchases and dividend payments.

However, membership in its global business continues to be a concern. High operating costs due to rising medical expenses are hurting margins. As such, the stock warrants a cautious stance.

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

Shares of Danaher have outperformed the Zacks Diversified Operations industry over the past year (+30.7% vs. +11.7%). The company’s Life Sciences unit is witnessing support from stable demand in the academic and applied markets. The segment has been witnessing positive responses toward its new products. The company’s commitment to return value to shareholders is encouraging.

Synergies from the Abcam acquisition bolster the company’s growth. Through its DBS initiatives, it has been able to reduce the impact of supply-chain constraints and inflationary pressures.

However, Danaher is plagued by weakness in the Biotechnology unit due to decreased demand in the bioprocessing business. Softness in the funding environment and lower underlying activity levels are affecting the high-growth markets’ performance. High debt levels may raise its financial obligations and drain its profitability. Given its international exposure, forex woes are weighing on its top line.

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

Abbott shares have gained +3.2% over the past six months against the Zacks Medical - Products industry’s gain of +11.7%. The company’s pipeline is generating several new growth prospects, which will help sustain the positive momentum and contribute to the strong growth projection in 2024.

Alinity, the company’s next-generation suite of systems, is a key driver in the core lab diagnostics business. EPD's impressive stretch of strong performance stems from the company’s unique business model. Freestyle Libre CGM device is also on a great trajectory, continually outpacing market growth.

Within Nutrition, after a period of hiccups, Abbott has finally reestablished itself as the market leader in the infant formula business, underscoring strong customer confidence in the company's products. However, the slump in COVID-19 testing-related sales is hurting Abbott’s overall growth. Tough macro conditions also pose a concern for its operations.

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

Shares of Ark Restaurants have underperformed the Zacks Retail - Restaurants industry over the past six months period (-3.8% vs. +1.6%). This microcap company of market capitalization of less than $100 million is facing rising operational costs in food and supplies, pressing margins. The company's sensitivity to economic shifts threatens dining spending, impacting revenues.

Lease obligations and the need to refresh premises could negatively impact cash flow. Shifts in consumer preferences and weather can disrupt operations. Reliance on key locations, rising labor and regulatory costs, competition, and cybersecurity risks pose threats.

Yet, Ark Restaurants' financial management, revenue resilience in the fiscal first quarter of 2024, diverse portfolio, and strategic expansion signal growth potential. Investments in infrastructure and operational efficiency aim at profitability. The company could potentially capitalize on the food service industry, which is projected to witness a robust expansion.

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

Other noteworthy reports we are featuring today include Intuit Inc. (INTU), CME Group Inc. (CME) and Marathon Petroleum Corporation (MPC).

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>>>