Wednesday, October 26, 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 The Home Depot, Inc. (HD), Elevance Health Inc. (ELV) and BP p.l.c. (BP). 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 >>>

The Home Depot shares have underperformed the Zacks Building Products - Retail industry over the past year (-21.4% vs. -18.6%). The company reported soft gross margin in the fiscal second quarter driven by higher supply chain investments. Higher inventory levels and interest expense also remain concerning.

However, The Home Depot has reported its ninth straight quarter of earnings and sales beats in the fiscal second quarter. Results gained from strong demand for home-improvement projects, robust housing market trends and ongoing investments.

The company also benefited from continued strength in both Pro and DIY categories, as well as digital momentum. Its interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters, aiding digital sales.

(You can read the full research report on The Home Depot here >>>)

Shares of Elevance Health have outperformed the Zacks Medical Services industry over the past year (+20.1% vs. -36.4%). The company’s improving top-line can be attributed to premium rate increases and higher memberships. Acquisitions and collaborations have enabled the company to strengthen its business portfolio.

Its well-performing Medicare and Medicaid businesses, coupled with several contract wins, are expected to drive its membership going ahead. Adjusted net income is anticipated to be more than $28.95 per share, higher than the prior outlook of greater than $28.70.

However, the company's escalating costs continue to put pressure on margins. Declining cash flows are also concerning. Its balance sheet with a massive debt of more than $21 billion can affect financial flexibility. As such, the stock warrants a cautious stance.

(You can read the full research report on Elevance Health here >>>)

BP’s shares have gained +8.2% over the past year against the Zacks Oil and Gas - Integrated - International industry’s gain of +34.3%. The company has a strong portfolio of upstream projects, backing impressive production growth. The company boasted that the target of adding a net production of 900 thousand barrels of oil equivalent per day by 2021 from key projects has been met successfully.

BP has set an aggressive energy transition plan to capitalize on the mounting demand for clean energy. Currently, high oil prices are aiding the company’s upstream operations. Notably, BP announced plans to execute a $3.5-billion share buyback, which is expected to be completed before reporting the third-quarter results.

However, the company’s balance sheet is considerably more levered than most peers, thereby limiting its financial flexibility. Also, increasing costs and expenses has been adversely affecting the energy giant’s income. As such, the stock warrants a cautious stance.

(You can read the full research report on BP here >>>)

Other noteworthy reports we are featuring today include Citigroup Inc. (C), Gilead Sciences, Inc. (GILD), and ServiceNow, Inc. (NOW).

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>>>