Monday, January 16, 2023

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 UnitedHealth Group Incorporated (UNH), The Coca-Cola Company (KO) and Roche Holding AG (RHHBY). 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 >>>

Shares of UnitedHealth Group have gained +4.5% over the past year against the Zacks Medical sector's -12% decline and -15.7% decline for the S&P 500 index. The company’s top line has been growing and the momentum should continue in the years ahead on the back of a strong market position, new deals, renewed agreements and expansion of service offerings.

The company's solid health services segment provides diversification benefits. UNH's Government business remains well-poised for growth. A sturdy balance sheet enables investments.

However, softness in commercial business due to COVID-induced volatilities persists. Rising operating costs are hurting margins. As such, the stock warrants a cautious stance.

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

Shares of Coca-Cola held up a lot better than many others in last year's tough market; the stock was effectively flat in 2022, modestly better than rival Pepsi's -0.3% decline, but significantly better than the Zacks Consumer Staple sector's -5.1% decline (the market overall was down -15.7%). The company is scheduled to report 2022 Q4 results on February 14th, but its preceding period results (2022 Q3) benefited from the continued momentum from the first half of 2022. Sales gained from revenue growth across its operating segments, aided by an improved price/mix and an increase in concentrate sales.

Coca-Cola benefited from underlying share gains in both at-home and away-from-home channels. According to the Zacks analyst estimate organic revenue growth of 14.8% and comparable earnings per share growth of 6.6%, in line with the company’s raised view for 2022. Innovations and accelerating digital investments bode well.

However, pressures from higher transportation and input costs remain. Higher marketing spends and currency headwinds are concerning.

(You can read the full research report on Coca-Cola here >>>)

Shares of Roche Holding have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-21.6% vs. +14.6%). The company’s performance has been hit by significantly lower COVID-related sales in both divisions as the pandemic eased out. Sales of Actemra/RoActemra and Ronapreve (COVID-19) are declining with the pandemic weakening in several countries since last year. The competition is stiff for Tecentriq. The decline in sales of drugs like Herceptin, Avastin and MabThera will continue to drag sales down. Pipeline setbacks are a concern.

Nevertheless, strong demand for new drugs, namely Hemlibra (hemophilia), Ocrevus (multiple sclerosis), Evrysdi (spinal muscular atrophy), Phesgo (cancer) and Tecentriq (cancer), maintained momentum. The Diagnostics division also remained stable in terms of the growth of its routine business.

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

Other noteworthy reports we are featuring today include Lockheed Martin Corporation (LMT), Lam Research Corporation (LRCX) and Valero Energy Corporation (VLO).

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>>>