Today's Must Read
Loan Demand, New Branches Aid JPMorgan (JPM) Amid Rate Cuts
Strong Service and Benefit Business Aids UnitedHealth (UNH)
Thursday, April 9, 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 Facebook (FB), JPMorgan Chase (JPM) and UnitedHealth Group (UNH). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Facebook’s shares have outperformed the S&P 500 over the past six months (-3.2% vs. -6.3%). The Zacks analyst believes that Facebook is benefiting from growth in Instagram Stories and Feed, and expanding user base in Asia Pacific.
The launch of Facebook View app, Facebook Pay, a simpler and faster Messenger for iOS app and more location control feature for Android users is a positive. Shares have outperformed the industry in the past year. However, Facebook expects ad-sales to be hurt by the coronavirus lockdowns despite a significant spike in traffic.
Moreover, increasing limitations in tracking user activity amid the growing privacy-related regulations and changes made in the mobile operating systems and browser platforms by Apple and Google as well as tools like the Off Facebook Activity controls are expected to affect top-line growth. Moreover, a persistent mix shift toward Stories is anticipated to weigh on ARPU.
Shares of JPMorgan have lost -10.5% over the past year against the Zacks Major Regional Banks industry’s fall of -23.6%. The Zacks analyst believes that decent loan demand, the acquisition of InstaMed, new branch openings and focus on credit card business will continue to aid the company's financials.
Its enhanced capital deployment plan reflects strong balance sheet position. Notably, the company has stopped its share buybacks with an aim to use the capital for lending activities amid coronavirus related slowdown. However, the Federal Reserve's accommodative monetary policy stance is expected to hurt top-line growth in the near term.
Challenges in expanding mortgage operations and the company’s significant dependence on capital markets revenues might hamper financials to some extent.
UnitedHealth’s shares have gained +8.9% over the past three months against the Zacks Medical Insurance industry’s fall of -0.1%. The Zacks analyst believes that the company’s revenues should continue to grow driven by its strong market position and attractive core business that continues to be driven by new deals, renewed agreements and expansion of service offerings.
UnitedHealth Group stands apart in the industry by virtue of healthcare services, technology and innovations offered by its unit, Optum. Its numerous acquisitions have led to inorganic growth. Its membership in the public and senior business has been growing consistently over the years and the trend is expected to continue.
Its solid balance sheet and consistent cash flow generation enables investment in business. Strong earnings guidance by the company instills investors' confidence. The company is, however, witnessing a slowdown in its international operations.
Other noteworthy reports we are featuring today include BHP Group (BHP), Humana (HUM) and Cognizant Technology Solutions (CTSH).
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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>>>