Tuesday, February 21, 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 JPMorgan Chase & Co. (JPM), Elevance Health, Inc. (ELV) and Vertex Pharmaceuticals Incorporated (VRTX). 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 JPMorgan Chase have outperformed the Zacks Banks - Major Regional industry over the past six months (+22.0% vs. +7.8%). The company’s fourth-quarter 2022 results show impacts of higher rates, decent loan demand and a rise in expenses and provisions. Opening new branches, strategic buyouts and global expansion will keep driving financials. Higher rates and a steady loan demand will aid net interest income (NII) growth.

The Zacks analyst estimates for NII (managed) show a CAGR of 6.2% by 2025. Yet, the volatile nature of the capital markets business and higher mortgage rates are likely to make fee income growth challenging. We expect non-interest income (managed) to be relatively stable this year.

Steadily rising costs is a major woe, and we expect the same to rise 5.8% in 2023. Given the possibility of an economic slowdown, provisions are likely to keep rising, with we projecting the same to jump 53.1% in 2023.

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

Elevance Health shares have outperformed the Zacks Medical Services industry over the past year (+11.5% vs. -18.4%). The company’s improving top line can be attributed to premium rate increases and higher memberships. Acquisitions, collaborations and product expansions 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. Growing premiums, stemming from rate increases are aiding the company's results. Elevance Health utilizes excess capital to boost shareholder value.

However, the company's escalating expenses continue to put pressure on margins. Its declining cash flows are also concerning. ELV's balance sheet with a massive debt of more than $22.3 billion can affect financial flexibility. As such, the stock warrants a cautious stance.

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

Shares of Vertex Pharmaceuticals have outperformed the Zacks Medical - Biomedical and Genetics industry over the past year (+27.6% vs. -6.7%). The company’s cystic franchise sales continue to grow, driven by its triple therapy, Trikafta/Kaftrio. New reimbursement agreements in ex-U.S. markets and label expansions to younger age groups are driving Trikafta/Kaftrio sales higher.

Vertex reported double-digit revenue growth over the last several years. Vertex has a broad clinical non-CF pipeline across six disease areas, which are progressing rapidly with multiple clinical milestones in 2023. Multiple late-stage projects have established proof of concept.

Vertex faces only minimal competition in its core CF franchise. However, Vertex’s dependence on just the CF franchise for commercial revenues is a concern. Vertex’s non-CF programs carry significant risk, which is a concern.

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

Other noteworthy reports we are featuring today include Sony Group Corporation (SONY), General Mills, Inc. (GIS) and AMETEK, Inc. (AME).

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>>>