Today's Must Read
Strong PBM Selling Season, Aetna Synergy Aid CVS Health (CVS)
Restructuring Efforts Aid Morgan Stanley (MS), Costs a Woe
Monday, January 13, 2020
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 (UNH), CVS Health (CVS) and Morgan Stanley (MS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
UnitedHealth’s shares have underperformed the Zacks Medical Insurance industry over the past year (+19% vs. +19.3%). The Zacks analyst believes that UnitedHealth Group stands apart in the industry by virtue of healthcare services, technology and innovations offered by its unit, Optum.
Numerous acquisitions made by the company have led to inorganic growth. Its solid balance sheet and consistent cash flow generation enable investment in business. Also, capital management by dividend payout and share buyback is another positive. Strong earnings guidance by the company instills investors' confidence.
The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 0.8% upward over the last 60 days. The slowdown of growth in international operations and underperformance in Medicaid business are some concerns.
Shares of CVS have gained +14.5% in the past three months against the Zacks Retail Pharmacies and Drug Stores industry's rise of +10.1%. The Zacks analyst is pleased with its solid progress in terms of the 2020 selling season. The company has started to witness increased customer traffic and incremental sales in pharmacy front store and MinuteClinics.
The company successfully executed its strategic priorities, resulting in all three of the company’s segments performing in line with, or above its expectations. The Health Care Benefits segment, launched after the Aetna acquisition, is showing strong momentum. The company posted better-than-expected third-quarter results on the back of robust progresses.
However, persistent reimbursement pressure and the impact of recent generic introductions dented the company’s retail LTC business growth. Also, Omnicare business performance should continue to remain soft through the rest of 2019.
Morgan Stanley's shares have gained +17.5% over the past six months against the Zacks Investment Banking industry's rise of +11.4%. The Zacks analyst believes that steady loan growth, strong balance sheet position and the company's continued focus on its corporate lending business are expected to continue to aid profitability.
The company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Notably, the acquisition of Solium Capital is in sync with the company’s efforts to further strengthen its wealth management business.
However, weaknesses in investment banking and trading are expected to hinder fee income growth to some extent and hurt the company’s top line. Moreover, given the decline in interest rates and a tough operating backdrop, the company’s performance is expected to remain sluggish in the near term.
Other noteworthy reports we are featuring today include Enbridge (ENB), Charles Schwab (SCHW) and Uber Technologies (UBER).
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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>>>