Today's Must Read
CVS Health's (CVS) PBM Arm to Gain from COVID-19 Measures
Defense Unit Benefits Boeing (BA), Poor 737 Deliveries Hurt
Friday, May 1, 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 Microsoft (MSFT), CVS Health (CVS) and Boeing (BA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Microsoft’s shares have outperformed the S&P 500 over the past year (+40.8% vs. -0.4%). The Zacks analyst believes that Microsoft's fiscal third-quarter results benefited from momentum in Azure, impressive Teams user growth led by coronavirus-induced work-from-home wave and uptick in Surface devices.
Moreover, the company is benefiting from growing user base of its different applications like Office 365 commercial, and Dynamics. Azure’s expanding customer base remains a key catalyst. Furthermore, it is well poised to expand the total addressable market through acquisitions of GitHub and PlayFab.
However, weak job market and lower spend on advertising due to the coronavirus outbreak are likely to weigh on LinkedIn and Search revenues. Further, delays in consulting business contract renewals and supply chain constraints in China are anticipated to limit growth.
Shares of CVS Health have lost -12% over the past six months against the Zacks Retail Pharmacies and Drug Stores industry’s fall of -16.1%. The Zacks analyst believes that the company's year-over-year improvement in the top line in the last-reported quarter was fueled by strong growth in the Pharmacy Services segment, which benefited from the upside in specialty services.
The company’s recently-introduced Health Care Benefits segment, following the Aetna acquisition, also holds immense promise. Additionally, solid year-over-year Retail/LTC comparisons were impressive. Strong expansion of both margins further buoys optimism on the stock.
The expansions of MinuteClinics and HealthHUBs during the quarter are also encouraging. CVS Health ended the fourth quarter with better-than-expected numbers. However, the LTC business is facing some industry-wide challenges. Reimbursement risk continues to be a dampener.
Boeing’s shares have lost -56.9% over the past three months against the Zacks Aerospace & Defense industry’s fall of -28.7%. The Zacks analyst believes that increase in defense budget by the current U.S. government should act as a growth catalyst for defense players like Boeing.
Boeing’s first-quarter 2020 results were mixed. While its bottom line came in better than the Zacks Consensus Estimate, its top line failed to meet the mark. Nevertheless, the company remains the largest aircraft manufacturer in the United States.
However, global outbreak of COVID-19 coupled with the ongoing grounding of the 737 MAX jets has significantly impacted Boeing’s business. Particularly, lower 737 deliveries have been hurting its earnings and cash flow for past couple of quarters. Moreover, Airbus beat Boeing as the world’s largest plane maker, for the first time in last eight years in 2019.
Other noteworthy reports we are featuring today include Facebook (FB), BP p.l.c. (BP) and Sherwin-Williams (SHW).
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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>>>