Today's Must Read
Intel (INTC) Banks on AI-based Alliances & Product Rollouts
Chevron (CVX) to Gain from Massive Permian Acreage
Friday, June 12, 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), Intel (INTC) and Chevron (CVX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
UnitedHealth’s shares have outperformed the Zacks Medical Insurance industry over the past year (+15.8% vs. +6.9%). The Zacks analyst believes that the company has been benefiting from higher segmental contributions, which helped it counter the fallout from the coronavirus-led crunch.
It stands out from the rest in its industry by virtue of healthcare services, technology and innovations offered by its unit, Optum. Its numerous acquisitions bolstered its inorganic growth profile. Its revenues should continue to grow, driven by a strong market position and an attractive core business.
Its solid balance sheet and consistent cash flow generation encourage investment in business. By retaining its 2020 earnings guidance, the company restores investor confidence. However, the company is witnessing a slowdown in its international operations. Commercial membership may also suffer due to increased joblessness.
Shares of Intel have gained +3.3% over the past six months against the Zacks General Semiconductor industry’s rise of +16.1%. The Zacks analyst believes that Intel is benefiting from momentum across both PC-centric and Data-centric domains.
Robust mix of high-performance second-generation Xeon Scalable processors and solid demand from Cloud service providers are expected to drive near-term growth. Moreover, the company is making advancements in the IoT space, courtesy of product introductions and tie ups. Additionally, Intel is witnessing strong momentum for its first 10-nanometer (nm) mobile CPU.
Notably, the company has not provided 2020 guidance citing coronavirus crisis-induced business uncertainty. Also, declining PC total addressable market, higher expenses pertaining to 10-nm ramp up and constrained supply amid coronavirus outbreak remain concerns.
Chevron’s shares have gained +7.1% over the past three months against the Zacks Integrated Oil industry’s rise of +12.5%. The Zacks analyst believes that Chevron’s well economics in the play continues to improve as the company has been able to achieve a 40% reduction in its development and production costs since 2015.
The company's worldwide production averaged a record 3,058 MBOE/d in 2019, reflecting an increase of 4.4% thanks to expansion in the lucrative Permian Basin. However, Chevron is not immune to this historic oil price crash, forcing it to cut capex and suspend buybacks. The company’s high oil price sensitivity is a concern too.
Moreover, the supermajor’s reserve replacement ratio of 44% is indicative its inability to add proved reserves to its reserve base to the amount of oil and gas produced.
Other noteworthy reports we are featuring today include Cisco Systems (CSCO), Citigroup (C) and QUALCOMM (QCOM).
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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>>>