Wednesday, September 7, 2022
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 Corp. (MSFT), CVS Health Corp. (CVS) and Lockheed Martin Corp. (LMT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Microsoft shares have declined -14.9% over the past year against the Zacks Computer – Software industry’s decline of -22.0%. The company’s increased spending on Azure enhancements amid stiff competition in the cloud space from Amazon is likely to dent margins. Nevertheless, the company’s performance is benefiting from strength in its Azure cloud platform amid accelerated global digital transformation.
Teams’ user growth is gaining from continuation of remote work and mainstream adoption of hybrid/flexible work model. Recovery in advertising and the job market boosted LinkedIn and Search revenues. Solid uptake of new Xbox consoles is aiding the gaming segment performance.
The company is witnessing growth in user base of its different applications including Microsoft 365 suite, Dynamics and Power Platform. Microsoft expects Surface revenues to grow in the mid-teens range, driven by strong demand for premium devices.
(You can read the full research report on Microsoft here >>>)
CVS Health’s shares have outperformed the Zacks Retail – Pharmacies and Drug Stores industry over the past year (+16.6% vs. +1.7%). The company’s robust sales growth across all three operating segments drove the top-line results. The extended cough, cold and flu season boosted sales in the Retail and Pharmacy businesses.
Within the Health Care Benefits arm, the continued growth across the entire range of insured and self-insured medical, pharmacy, dental and behavioral health products and services instills optimism. Its raised EPS guidance for 2022 is indicative of this growth momentum continuing.
However, the contraction of margins does not bode well. The decline in COVID-19 vaccinations and testing sales is a downside. Persistent pharmacy reimbursement headwinds also continued to impact business results.
(You can read the full research report on CVS Health here >>>)
Lockheed Martin’s shares have outperformed the Zacks Aerospace – Defense industry over the past year (+23.0% vs. -32.9%). The company remains the largest U.S. defense contractor, with a steady inflow of orders from its leveraged presence in the Army, Air Force, Navy and IT programs. Steady contract flows and subsequent backlog growth bolster its long-term revenue prospects.
The F-35 program continues to be a key growth program for the company’s Aeronautics business segment and boosts its sales prospects. Budgetary provisions tend to boost its business.
Yet, the tiff between the U.S. and Turkey on the latter’s accepting of Russian products might hurt Lockheed’s component supply from Turkey. The company is facing performance issues concerning some of its products, which, in turn, may hamper results. Also, uncertainties revolving around possible sanctions from China on Lockheed might impact the company.
(You can read the full research report on Lockheed Martin here >>>)
Other noteworthy reports we are featuring today include Berkshire Hathaway Inc. (BRK.B), Dominion Energy, Inc. (D) and Mitsubishi UFJ Financial Group, Inc. (MUFG)
Mark Vickery
Senior Editor
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>>>
Today’s Must Read
Adoption of Cloud & Office 365 Strength Aid Microsoft (MSFT)
CVS Health’s (CVS) Pharmacy Sales Grow Amid High Drug Prices
Order Growth Boosts Lockheed (LMT), Tiff With Turkey Ails
Featured Reports
Investment on Infrastructure & Clean Assets Aid Dominion (D)
Per the Zacks analyst, Dominion’s investment of $37 billion through 2026 to enhance clean electricity generation and strengthen its infrastructure will boost its profitability.
Business Model Revamp Aids Mitsubishi (MUFG), Costs Ail
Per the Zacks analyst, Mitsubishi UFJ’s up-gradation and reformation of its business model will improve profitability. Yet, higher costs might impede bottom-line growth.
EV Efforts Boost General Motors (GM) Amid Chip & Cost Woes
General Motors’ EV drive bodes well. Launches like the GMC Hummer and Cadillac Lyriq EVs will fuel its top-line. But, per the Zacks analyst, chip shortage and cost inflation will hurt prospects.
Fidelity (FIS) Strategic Acquisitions Aid, Rising Costs Hurt
Per the Zacks analyst, multiple buyouts and technological investments are helping Fidelity National enhance its capabilities. However, increasing expenses remain a concern.
Suncor (SU) Buoyed by Integrated Business Model
The Zacks analyst believes that Suncor’s integrated business model makes it less exposed to the volatile commodity market and positions it well for strong cash flow generation.n
Strong Portfolio & Acquisitions to Drive PTC’s Performance
Per the Zacks analyst, PTC’s performance is being driven by robust demand for products like Creo and Windchill. Strategic acquisitions have played a pivotal part in boosting the company’s business.
Novavax’s (NVAX) Dependence on COVID-19 Vaccine Sales A Woe
Per the Zacks analyst, Novavax’s (NVAX) protein-based COVID-19 vaccine shows potential. However, the delayed product launch by management has severely impacted the vaccine’s sales.
New Upgrades
Berkshire (BRK.B) Continues to Gain From Insurance Business
Per the Zacks analyst, Berkshire is set to grow on its solid insurance business which drives earnings, fuels increase in float as well as generates maximum return on equity.
Construction Materials Segment to Drive Carlisle (CSL)
Per the Zacks analyst, solid traction of Carlisle’s Construction Materials segment, led by reroofing market in the United States and growth in the architectural metals platform will drive its sales.
Fleet Expansion & Pro-Investor Steps Aid Avis Budget (CAR)
The Zacks analyst is positive about Avis Budget’s expansion of its connected vehicles fleet to manage thee rental program. Also, its impressive record of rewarding its shareholders is aiding.
New Downgrades
Weakness in Software License Revenues, Competition Ail SAP
Per the Zacks analyst, continued decline in software licenses revenues remains an overhang for SAP amid intensifying competition in the cloud space. Increasing costs are added concerns
News Corporation (NWSA) Witnesses Soft Subscription Video Unit
Per Zacks analyst, News Corporation’s Subscription Video Services unit has been sluggish for a while. Lower revenues from residential broadcast product and currency headwinds are hurting the segment.
Higher Rates & Supply-Chain Woes Hurt Toll Brothers (TOL)
Per the Zacks analyst, Toll Brothers have been grappling with municipal delays, labor shortages and supply chain disruptions, along with a softer demand environment.
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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
Dominion Energy Inc. (D) : Free Stock Analysis Report
CVS Health Corporation (CVS) : Free Stock Analysis Report
Mitsubishi UFJ Financial Group, Inc. (MUFG) : Free Stock Analysis Report
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