Wednesday, December 14, 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 Verizon Communications Inc. (VZ), Honeywell International Inc. (HON) and CVS Health Corporation (CVS). 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 >>>

Verizon shares have underperformed the broader market (-27.1% vs. -17% for the S&P 500 index) and rival AT&T (T) (-22.2%) this year, with weak guidance at the last quarterly relase adding to the negative momentum. An intensely competitive market and hefty expenses on promotions and lucrative discounts to attract customers are likely to hurt profitability. Spectrum crunch with a saturated wireless market is another headwind.

However, Verizon plans to accelerate the availability of the 5G Ultra-Wideband network with C-Band deployment, focusing on 5G mobility, nationwide broadband, mobile edge compute and business solutions. It is offering various mix-and-match pricing in both wireless and home broadband plans.

Verizon is also aggressively expanding its fiber optics network to support 4G LTE, 5G wireless standards and wireline connections. Customer-focused planning, disciplined engineering and continued network upgrades will likely augment its market position.

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

Honeywell shares have outperformed the Zacks Diversified Operations industry over the past year (+2.5% vs. -15.2%) on the back of recovery in commercial flight hours, strong fire products and building management system sales, strong demand in the marine products business and strength in gas processing orders.

Following a strong third quarter, the company improved its earnings guidance for 2022. Pricing actions and cost-control measures support the company’s margins. Strong free cash flow generation capacity supports the company’s shareholder-friendly activities.

However, volume softness due to supply-chain disruptions, especially semiconductors and parts shortages, is concerning. Weakness in the Safety and Productivity Solutions unit due to lower personal protective equipment and warehouse automation volumes is also worrisome. Raw material cost-inflation and adverse foreign currency movements are other headwinds.

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

CVS Health shares have been standout performers this year, outperforming the broader market (-1.9% vs. -17% for the S&P 500 index) and rival Walgreens Boots Alliance (WBA - down -21.4%), reflecting CVS' robust sales growth across all three operating segments drove the top-line results.

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. The raised EPS guidance for 2022 is indicative of this growth momentum continuing.

However, the contraction of margins on escalating costs does not bode well. The decline in COVID-19 vaccinations and testing sales is a downside. Further, persistent pharmacy reimbursement headwinds also continued to impact business performance in the quarter under review.

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

Other noteworthy reports we are featuring today include Intuit Inc. (INTU), ICICI Bank Limited (IBN) and Incyte Corporation (INCY).
 
Director of Research
 
Sheraz Mian
 
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>>>