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The Zacks Analyst Blog Highlights Tesla, Chevron, Exxon Mobil, Broadcom and UnitedHealth Group
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For Immediate Release
Chicago, IL – July 21, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Tesla Inc. (TSLA - Free Report) , Chevron Corp. (CVX - Free Report) , Exxon Mobil Corp. (XOM - Free Report) , Broadcom Inc. (AVGO - Free Report) and UnitedHealth Group Inc. (UNH - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
July Rally May Indicate the Peak of U.S. Inflation: 5 Picks
Wall Street saw an impressive rally on Jul 19. U.S. stock markets have witnessed a solid northbound move so far this month. This is happening despite the fact that the consumer price index (CPI) soared to its 41-year high in June and a section of economists and financial experts warned that the Fed may hike the benchmark lending rate by 1% in July FOMC.
At this stage, it will be prudent to invest in quality stocks — corporate giants with market capital > $50 billion and a favorable Zacks Rank — to make a profit going forward. Five of these stocks are — Tesla Inc., Chevron Corp., Exxon Mobil Corp., Broadcom Inc. and UnitedHealth Group Inc.
Is Inflation Receding Slowly?
The data revealed that excluding the volatile food and energy items, the rate of increase in the core CPI remained mostly stable in second-quarter 2022. Moreover, in the past month, several commodity prices declined despite the continuation of the Russia-Ukraine war. A spike in commodity prices was one of the major reasons for higher input costs to businesses.
The price of both WTI and Brent crude is hovering around $100 per barrel. In March, these prices were around $125 to $130 per barrel. Prices of natural gas also saw a downtrend. Prices of base metals like steel, aluminum, copper, zinc and platinum reduced considerably primarily due to the collapse of China's booming property market.
The U.S. economy will see the positive impact of lower commodity prices in the coming months. Moreover, the Fed has raised the Fed Fund rate from 0-0.25% at the beginning of March to 1.50-1.75% by June end. Moreover, the central bank is set to hike the rate by at least another 75 basis points in July. The main street will see the impact of a rate hike in the coming months too.
Finally, we should not forget that an angry President Joe Biden had instantly expressed his reservation as soon as the June CPI data was released calling them "out of date." His displeasure was that the data failed to capture the effect of falling gasoline prices in June.
Recently, The Wall Street Journal also reported that many Fed officials are not in favor of raising interest rate by 1% in July as it may result in macro-economic disequilibrium.
A Bear Market Rally or the Market Bottomed Out
Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have tumbled 12.4%, 17.4% and 25.1%, respectively. From their all-time highs, these indexes have tanked 13.9%, 18.3% and 27.8%, respectively.
However, month to date, the Dow, the S&P 500 and the Nasdaq Composite have gained 3.4%, 4% and 6.2%, respectively. From their 52-week lows recorded on Jun 16 or Jun 17, the Dow, the S&P 500 and the Nasdaq Composite have rallied 7.3%, 8.2% and 10.9%, respectively. By any means, these are substantial recoveries.
Market participants are currently divided on whether the recent recovery is a bear market rally or if the markets have already bottomed out. Whatever the reason, investor sentiment has improved to a large extent in July.
The University of Michigan reported that the preliminary data for U.S. consumer sentiment rose to 51.1% in July from 50% in June. Wall Street's volatility gauge — the CBOE VIX — has declined 15.4% in July so far.
Our Top Picks
We have narrowed our search to five U.S. corporate bigwigs with strong potential for the rest of 2022. These stocks have seen positive earnings estimate revisions in the last 30 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Tesla has acquired a substantial market share within the electric car segment. Increasing Model 3 delivery, which forms a significant chunk of TSLA's overall deliveries, is aiding its top line. Along with Model 3, Model Y is contributing to its revenues. The global auto industry is gradually moving toward electric vehicles. Tesla is expected to be the largest beneficiary of this trend.
Despite the chip crisis, Tesla reported strong deliveries of 254,695 units in second-quarter 2022, 27% year over year. Additionally, TSLA's energy generation and storage revenues are growing, thanks to the positive reception of Megapack and Powerwall products.
Zacks Rank #2 TSLA has an expected earnings growth rate of 65.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 11.7% over the last 7 days.
Chevron is one of the best-placed global integrated oil firms to achieve a sustainable production ramp-up. CVX's existing project pipeline is one of the best in the industry, thanks to its premier position in the lucrative Permian Basin. The WTI crude oil price is hovering around $100 per barrel. The price is likely to remain elevated as the Russia-Ukraine conflict is yet to be resolved.
Chevron's Noble Energy takeover has expanded its footprint in the region and the DJ Basin. CVX now has access to Noble Energy's low-cost, proven reserves along with cash-generating offshore assets in Israel — particularly the flagship Leviathan natural gas project — thereby boosting its footing in the Mediterranean.
Zacks Rank #2 CVX has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 2.2% over the last 30 days.
Exxon Mobil made multiple world-class oil discoveries at the Stabroek Block, located off the coast of Guyana. XOM raised the estimate for discovered recoverable resources from the Stabroek Block to approximately 10 billion oil-equivalent barrels. The WTI crude oil price is hovering around $100 per barrel. The price is likely to remain elevated as the Russia-Ukraine clash is continuing.
Exxon Mobil's bellwether status and an optimal integrated capital structure, which have historically led to industry-leading returns make it a relatively lower-risk energy sector play. The integrated oil behemoth expects to reduce greenhouse gas emissions by 30% in its upstream business. By the same time, XOM expects to reduce flaring and methane emissions by 40%.
Zacks Rank #2 Exxon Mobil has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 9.1% over the last 30 days.
Broadcom is riding on continued strength in networking and server storage segments. Networking is well-poised on strong adoption of AVGO's next-gen merchant switching and routing solutions by hyperscalers, enterprises and service providers. Broadcom is benefiting from the world's first complete end-to-end chipset solutions for the Wi-Fi 7 ecosystem.
In the server storage connectivity domain, much of the growth is anticipated from the continued recovery of enterprise IT spending deployed toward upgrading computer services. An upbeat third-quarter fiscal 2022 guidance is encouraging. The recently announced VMware acquisition will aid prospects in the long term.
Zacks Rank #1 Broadcom has an expected earnings growth rate of 32.3% for the current fiscal-year (ending October 2022). The Zacks Consensus Estimate for current fiscal-year earnings has improved 0.3% over the last 30 days.
UnitedHealth Group has a solid top line that has been growing and the momentum should continue in the years ahead. UNH is likely to gain on the back of a strong market position and an attractive core business that continues to be driven by new deals, renewed agreements and expansion of service offerings.
For this year, UnitedHealth Group expects revenues in the range of $317-$320 billion. Its solid health services segment provides diversification benefits. UNH's Government business remains well-poised for growth. A sturdy balance sheet enables investments and prudent capital deployment.
Zacks Rank #2 UnitedHealth Group has an expected earnings growth rate of 14.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 7 days.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Tesla, Chevron, Exxon Mobil, Broadcom and UnitedHealth Group
For Immediate Release
Chicago, IL – July 21, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Tesla Inc. (TSLA - Free Report) , Chevron Corp. (CVX - Free Report) , Exxon Mobil Corp. (XOM - Free Report) , Broadcom Inc. (AVGO - Free Report) and UnitedHealth Group Inc. (UNH - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
July Rally May Indicate the Peak of U.S. Inflation: 5 Picks
Wall Street saw an impressive rally on Jul 19. U.S. stock markets have witnessed a solid northbound move so far this month. This is happening despite the fact that the consumer price index (CPI) soared to its 41-year high in June and a section of economists and financial experts warned that the Fed may hike the benchmark lending rate by 1% in July FOMC.
At this stage, it will be prudent to invest in quality stocks — corporate giants with market capital > $50 billion and a favorable Zacks Rank — to make a profit going forward. Five of these stocks are — Tesla Inc., Chevron Corp., Exxon Mobil Corp., Broadcom Inc. and UnitedHealth Group Inc.
Is Inflation Receding Slowly?
The data revealed that excluding the volatile food and energy items, the rate of increase in the core CPI remained mostly stable in second-quarter 2022. Moreover, in the past month, several commodity prices declined despite the continuation of the Russia-Ukraine war. A spike in commodity prices was one of the major reasons for higher input costs to businesses.
The price of both WTI and Brent crude is hovering around $100 per barrel. In March, these prices were around $125 to $130 per barrel. Prices of natural gas also saw a downtrend. Prices of base metals like steel, aluminum, copper, zinc and platinum reduced considerably primarily due to the collapse of China's booming property market.
The U.S. economy will see the positive impact of lower commodity prices in the coming months. Moreover, the Fed has raised the Fed Fund rate from 0-0.25% at the beginning of March to 1.50-1.75% by June end. Moreover, the central bank is set to hike the rate by at least another 75 basis points in July. The main street will see the impact of a rate hike in the coming months too.
Finally, we should not forget that an angry President Joe Biden had instantly expressed his reservation as soon as the June CPI data was released calling them "out of date." His displeasure was that the data failed to capture the effect of falling gasoline prices in June.
Recently, The Wall Street Journal also reported that many Fed officials are not in favor of raising interest rate by 1% in July as it may result in macro-economic disequilibrium.
A Bear Market Rally or the Market Bottomed Out
Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have tumbled 12.4%, 17.4% and 25.1%, respectively. From their all-time highs, these indexes have tanked 13.9%, 18.3% and 27.8%, respectively.
However, month to date, the Dow, the S&P 500 and the Nasdaq Composite have gained 3.4%, 4% and 6.2%, respectively. From their 52-week lows recorded on Jun 16 or Jun 17, the Dow, the S&P 500 and the Nasdaq Composite have rallied 7.3%, 8.2% and 10.9%, respectively. By any means, these are substantial recoveries.
Market participants are currently divided on whether the recent recovery is a bear market rally or if the markets have already bottomed out. Whatever the reason, investor sentiment has improved to a large extent in July.
The University of Michigan reported that the preliminary data for U.S. consumer sentiment rose to 51.1% in July from 50% in June. Wall Street's volatility gauge — the CBOE VIX — has declined 15.4% in July so far.
Our Top Picks
We have narrowed our search to five U.S. corporate bigwigs with strong potential for the rest of 2022. These stocks have seen positive earnings estimate revisions in the last 30 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Tesla has acquired a substantial market share within the electric car segment. Increasing Model 3 delivery, which forms a significant chunk of TSLA's overall deliveries, is aiding its top line. Along with Model 3, Model Y is contributing to its revenues. The global auto industry is gradually moving toward electric vehicles. Tesla is expected to be the largest beneficiary of this trend.
Despite the chip crisis, Tesla reported strong deliveries of 254,695 units in second-quarter 2022, 27% year over year. Additionally, TSLA's energy generation and storage revenues are growing, thanks to the positive reception of Megapack and Powerwall products.
Zacks Rank #2 TSLA has an expected earnings growth rate of 65.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 11.7% over the last 7 days.
Chevron is one of the best-placed global integrated oil firms to achieve a sustainable production ramp-up. CVX's existing project pipeline is one of the best in the industry, thanks to its premier position in the lucrative Permian Basin. The WTI crude oil price is hovering around $100 per barrel. The price is likely to remain elevated as the Russia-Ukraine conflict is yet to be resolved.
Chevron's Noble Energy takeover has expanded its footprint in the region and the DJ Basin. CVX now has access to Noble Energy's low-cost, proven reserves along with cash-generating offshore assets in Israel — particularly the flagship Leviathan natural gas project — thereby boosting its footing in the Mediterranean.
Zacks Rank #2 CVX has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 2.2% over the last 30 days.
Exxon Mobil made multiple world-class oil discoveries at the Stabroek Block, located off the coast of Guyana. XOM raised the estimate for discovered recoverable resources from the Stabroek Block to approximately 10 billion oil-equivalent barrels. The WTI crude oil price is hovering around $100 per barrel. The price is likely to remain elevated as the Russia-Ukraine clash is continuing.
Exxon Mobil's bellwether status and an optimal integrated capital structure, which have historically led to industry-leading returns make it a relatively lower-risk energy sector play. The integrated oil behemoth expects to reduce greenhouse gas emissions by 30% in its upstream business. By the same time, XOM expects to reduce flaring and methane emissions by 40%.
Zacks Rank #2 Exxon Mobil has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 9.1% over the last 30 days.
Broadcom is riding on continued strength in networking and server storage segments. Networking is well-poised on strong adoption of AVGO's next-gen merchant switching and routing solutions by hyperscalers, enterprises and service providers. Broadcom is benefiting from the world's first complete end-to-end chipset solutions for the Wi-Fi 7 ecosystem.
In the server storage connectivity domain, much of the growth is anticipated from the continued recovery of enterprise IT spending deployed toward upgrading computer services. An upbeat third-quarter fiscal 2022 guidance is encouraging. The recently announced VMware acquisition will aid prospects in the long term.
Zacks Rank #1 Broadcom has an expected earnings growth rate of 32.3% for the current fiscal-year (ending October 2022). The Zacks Consensus Estimate for current fiscal-year earnings has improved 0.3% over the last 30 days.
UnitedHealth Group has a solid top line that has been growing and the momentum should continue in the years ahead. UNH is likely to gain on the back of a strong market position and an attractive core business that continues to be driven by new deals, renewed agreements and expansion of service offerings.
For this year, UnitedHealth Group expects revenues in the range of $317-$320 billion. Its solid health services segment provides diversification benefits. UNH's Government business remains well-poised for growth. A sturdy balance sheet enables investments and prudent capital deployment.
Zacks Rank #2 UnitedHealth Group has an expected earnings growth rate of 14.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 7 days.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.