Friday, January 5, 2018
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), Intel (INTC) and UnitedHealth (UNH). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-rated Microsoft 's shares have outperformed the Zacks Technology sector over the last year (up +38.6% versus +28.1%) The company is dealing with the recent security bug which poses a huge risk for users. In this context, it is rolling out patches to fix Windows kernels in order to address the vulnerability.
Additionally, Microsoft's recent blockchain deals with Hapoalim and Accenture and its Coco framework are tailwinds. The Zacks analyst expects rapid adoption of Azure and Office 365 to remain the key catalysts in the near future. Further, collaborations with the likes of Amazon, Red Hat, Symantec, Cray and PAREXEL are beneficial for the company's growth prospects.
Microsoft's strategic initiatives to enter the augmented reality and virtual reality market with the acquisition of Altspace VR and launch of mixed reality headsets are other positives. However, intense competition from Sony's PS4 is a headwind.
Shares of Intel have gained +21.8% year to date, underperforming the broader Zacks Technology sector as well as the red-hot semiconductors space, which are up +28.1% and +49.1%, respectively. But Intel is benefiting from robust performance of the Data Center Group, Internet-of-Things Group, Non-Volatile Memory Solutions and Programmable Solutions Group. These segments form the crux of Intel's data-centric business model.
Further, the launch of Xeon Scalable, Core 8 chips, Myriad X and next-generation desktop processors are key catalysts. The new desktop processors are expected to help Intel's gaming endeavors amid stiff competition from AMD and NVIDIA. Moreover, the Core 8 launch is expected to boost Intel's PC market share.
However, recently, the company has encountered a major security issue. The bug is apparently present in nearly every Intel CPU made within the last decade. The security flaw could provide attackers with access to security keys, passwords, and cached files of a device's kernel memory. Stiff competition from peers adds to its woes.
(You can read the full research report on Intel here >>> ).
UnitedHealth 's shares have outperformed the Zacks Medical Insurance industry in the last six months (up +20% vs. +18.9%). The Zacks analyst likes the company's robust Government business and continued strong performance at Optum. International business and strong capital position are its other positives.
The recent announced acquisition of a Chilean company will further expand its overseas business. It has been witnessing an increase in membership for the past many years.
On the back of its impressive earnings in the first nine months, the company raised its 2017 guidance. Its strong guidance for 2018 also instills investors' confidence in the company. It has reduced exposure to the troubled public exchange business. Though this move will shield it from losses in this business, premium revenues are likely to be affected. Charges related to Penn Treaty are other causes of concern.
Other noteworthy reports we are featuring today include Thermo Fisher (TMO), Mondelez (MDLZ) and Deere (DE).
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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 Trendsand Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
The Zacks analyst is bullish on Thermo Fisher boosting top-line and new capabilities through buyouts like Patheon and FEI.
The Zacks analyst believes that solid execution allowed Halliburton to improve profitability at its Drilling and Evaluation unit but is concerned about pricing pressure in the international market.
The Zacks analyst likes the company's efforts to upgrade its fleet. Efforts to reward shareholders also raise optimism in the stock.
Per the Zacks analyst, Deere's revenues will mainly be driven by rising construction investment led by residential activity and infrastructure.
Per the Zacks analyst, Emerson is enjoying robust demand in global HVAC and refrigeration markets, higher optimization projects and MRO activity.
The Zacks analyst believes that Trimble's acquisition strategy, product enhancements, along with its re-aligned cost structure are positives.
The covering analyst stresses that Mondelez's efficient cost savings has resulted in margin expansion despite weak volume trends owing to sluggish demand.
Per the Zacks analyst, Everest Re is poised to benefit from its global presence, product diversification, capital adequacy, financial flexibility and traditional risk management capabilities.
Per the Zacks analyst, Verisk continuously seeks to expand its portfolio by leveraging its deep knowledge and embedded position to develop new, proprietary data sets and predictive analytics.
Per the Zacks analyst, Praxair is well poised to gain traction from rising demand for industrial gases driven by manifold growth in its application areas. Backlog remains solid at $1.5 billion.
Per the Zacks analyst, the dependence of Sarepta on single product, Exondys 51, is a concern for its near term growth. Competition in RNA-based treatment is another threat.
Per the Zacks analyst, aging infrastructure poses risks to Ameren's system reliability and may force it to incur unplanned costs. Also, Ameren bears high expenses to comply with air emission rules.
The Zacks analyst is concerned about Stone Energy's declining proved crude and natural gas reserves which will affect production.
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