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The Zacks Analyst Blog Highlights 3M, Cigna, UnitedHealth Group, Exxon Mobil, and ConocoPhillips
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For Immediate Release
Chicago, IL – June 2, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: 3M Co. (MMM - Free Report) , Cigna Corp. (CI - Free Report) , UnitedHealth Group Inc. (UNH - Free Report) , Exxon Mobil Corp. (XOM - Free Report) and ConocoPhillips (COP - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Volatility Reigns Supreme on Wall Street: Top 5 Picks for June
Extreme volatility has gripped the U.S. stock markets and Wall Street remained capricious even after the first five months of 2022. A series of global headwinds like mounting inflation, slowing economic growth, concerns about a recession and a higher interest rate regime, tougher monetary policies adopted by major central banks and prolonged devastation of the supply-chain system have significantly dented market participants' confidence.
Higher commodity prices, especially prices of crude oil and natural gas, due to the lingering war between Russia and Ukraine and uncertainty about China's recovery from the resurgence of COVID-19 and its economic prosperity in the near term made investors jittery.
Stock prices have corrected to a great extent so far this year. Major stock indexes are still well off from their recent highs. Several stocks are currently available at lucrative valuations. At this stage, it will be prudent to invest in fundamentally strong stocks with a favorable Zacks Rank. Five such stocks are — 3M Co., Cigna Corp., UnitedHealth Group Inc., Exxon Mobil Corp. and ConocoPhillips.
An Eventful May
The last month was an eventful one for Wall Street. The Nasdaq Composite was in bear territory from March while the S&P 500 briefly fell into the bear market in May and is currently in the correction zone. The Dow, however, managed to stay out of the bear market and remained in correction territory.
In May, the Dow registered the eighth consecutive weekly decline, its longest since April 1932. Both the S&P 500 and the Nasdaq Composite declined for the seventh straight week, marking their longest weekly losing streak since March 2001. However, in the last week, all three major stock indexes posted their best weekly performance since November 2020, thanks to a relief rally on Wall Street.
At the end, May was evenly poised for investors. The Dow and the S&P 500 remained flat despite fluctuating significantly in most of the trading sessions. The Nasdaq Composite dropped 2.1%.
Year to date, the Dow, the S&P 500 and the Nasdaq Composite – have declined 9.2%, 13.3% and 22.8%, respectively. At present, the Dow, the S&P 500 and the Nasdaq Composite are down 10.7%, 14.25 and 25.5%, respectively, from their recent highs.
Solid Fundamentals of the U.S. Economy
In 2022, the biggest drivers of the U.S. stock markets should be the nation's strong economic fundamentals. The labor market has returned to the pre-pandemic level. Aggregate demand remained strong despite skyrocketing inflation. The two inflation measures — the CPI and PCE Price index Data — for April dropped marginally.
The retail sales and industrial production data for April confirmed that both consumer spending and business investment remained solid amid difficulties. The ISM manufacturing and services indexes remained elevated despite some decline in April. The Conference Board's Consumer Confidence index and the University of Michigan's Consumer Sentiment Index remained elevated too.
Moreover, the U.S. economy will get more upside from the government's infrastructure spending. On Nov 15, President Joe Biden signed a bipartisan infrastructure bill of $550 billion in addition to the previously approved funds of $450 billion for five years. Total spending may go up to $1.2 trillion if the plan is extended to eight years.
Our Top Picks
We have narrowed our search to five U.S. corporate behemoths (market capital > $50 billion). These companies have robust business model diversified globally, strong financial position to sustain higher interest rate regime and globally acclaimed brand recognition.
3M seems well-positioned to benefit from its solid product portfolio, marketing activities and shareholder-friendly policies. Healthy businesses in electronic materials, home improvement, manufacturing and healthcare IT will be tailwinds. MMM's ability to generate strong cash flows adds to its strength. For 2022, it anticipates total revenue growth of 1-4%, with organic growth of 2-5%.
In the long term, 3M intends to become more competent on the back of product-portfolio solidification. MMM's household products like Nexcare, Post-it, Scotch, Scotch-Brite and Scotchgard are market leaders in their individual categories.
3M has an expected earnings growth rate of 7.3% for the current year. The Zacks Consensus Estimate for the current year has improved 5.1% over the past 60 days.
Cigna's revenues have been increasing consistently for the past several years, driven by acquisitions, superior operating performance and high-quality products and services portfolio. CI's 2018 buyout of Express Scripts diversified its business by adding pharmacy benefits to insurance operations.
Business streamlining by divesting Group Life and Disability insurance business will help Cigna focus on core growth areas. An expected increase in medical membership bodes well. For 2022, CI expects adjusted income from operations to be at least $22.40 per share.
Cigna has an expected earnings growth rate of 10.7% for the current year. The Zacks Consensus Estimate for the current year has improved 0.7% over the past 60 days.
UnitedHealth Group's top line has been growing and the momentum should continue in the years ahead on the back of a strong market position and an attractive core business that continues to be driven by new deals, renewed agreements and expansion of service offerings.
For this year, UNH expects revenues in the range of $317-$320 billion. UnitedHealth Group's solid health services segment provides diversification benefits. UNH's government business remains well-poised for growth. A sturdy balance sheet enables investments and prudent capital deployment through share buybacks and dividends.
UnitedHealth Group has an expected earnings growth rate of 14.4% for the current year. The Zacks Consensus Estimate for the current year has improved 0.3% over the past 60 days.
Exxon Mobil made multiple world-class oil discoveries at the Stabroek Block, located off the coast of Guyana. XOM raised the estimate for discovered recoverable resources from the Stabroek Block to approximately 10 billion oil-equivalent barrels. The WTI crude oil price is hovering well above $100 per barrel. The price is likely to remain elevated as the Russia-Ukraine clash has intensified.
Exxon Mobil's bellwether status and an optimal integrated capital structure, which have historically led to industry-leading returns make it a relatively lower-risk energy sector play. The integrated oil behemoth expects to reduce greenhouse gas emissions by 30% in its upstream business. By the same time, XOM expects to reduce flaring and methane emissions by 40%.
Exxon Mobil has an expected earnings growth rate of 89% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 37.8% over the past 30 days.
ConocoPhillips holds the bulk of acres in the three big unconventional plays, namely Eagle Ford shale, Delaware basin and Bakken shale, which are rich in oil. COP also has a foothold in Canada's oil sand resources and exposure to developments related to liquefied natural gas.
ConocoPhillips announced an agreement to purchase all Royal Dutch Shell assets in the prolific Permian. The deal reflects COP's aim of broadening its Permian presence. The transaction is highly accretive and involves the acquisition of roughly 225,000 net acres in the heart of the core Delaware basin.
ConocoPhillips has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 24.9% over the past 30 days.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights 3M, Cigna, UnitedHealth Group, Exxon Mobil, and ConocoPhillips
For Immediate Release
Chicago, IL – June 2, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: 3M Co. (MMM - Free Report) , Cigna Corp. (CI - Free Report) , UnitedHealth Group Inc. (UNH - Free Report) , Exxon Mobil Corp. (XOM - Free Report) and ConocoPhillips (COP - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Volatility Reigns Supreme on Wall Street: Top 5 Picks for June
Extreme volatility has gripped the U.S. stock markets and Wall Street remained capricious even after the first five months of 2022. A series of global headwinds like mounting inflation, slowing economic growth, concerns about a recession and a higher interest rate regime, tougher monetary policies adopted by major central banks and prolonged devastation of the supply-chain system have significantly dented market participants' confidence.
Higher commodity prices, especially prices of crude oil and natural gas, due to the lingering war between Russia and Ukraine and uncertainty about China's recovery from the resurgence of COVID-19 and its economic prosperity in the near term made investors jittery.
Stock prices have corrected to a great extent so far this year. Major stock indexes are still well off from their recent highs. Several stocks are currently available at lucrative valuations. At this stage, it will be prudent to invest in fundamentally strong stocks with a favorable Zacks Rank. Five such stocks are — 3M Co., Cigna Corp., UnitedHealth Group Inc., Exxon Mobil Corp. and ConocoPhillips.
An Eventful May
The last month was an eventful one for Wall Street. The Nasdaq Composite was in bear territory from March while the S&P 500 briefly fell into the bear market in May and is currently in the correction zone. The Dow, however, managed to stay out of the bear market and remained in correction territory.
In May, the Dow registered the eighth consecutive weekly decline, its longest since April 1932. Both the S&P 500 and the Nasdaq Composite declined for the seventh straight week, marking their longest weekly losing streak since March 2001. However, in the last week, all three major stock indexes posted their best weekly performance since November 2020, thanks to a relief rally on Wall Street.
At the end, May was evenly poised for investors. The Dow and the S&P 500 remained flat despite fluctuating significantly in most of the trading sessions. The Nasdaq Composite dropped 2.1%.
Year to date, the Dow, the S&P 500 and the Nasdaq Composite – have declined 9.2%, 13.3% and 22.8%, respectively. At present, the Dow, the S&P 500 and the Nasdaq Composite are down 10.7%, 14.25 and 25.5%, respectively, from their recent highs.
Solid Fundamentals of the U.S. Economy
In 2022, the biggest drivers of the U.S. stock markets should be the nation's strong economic fundamentals. The labor market has returned to the pre-pandemic level. Aggregate demand remained strong despite skyrocketing inflation. The two inflation measures — the CPI and PCE Price index Data — for April dropped marginally.
The retail sales and industrial production data for April confirmed that both consumer spending and business investment remained solid amid difficulties. The ISM manufacturing and services indexes remained elevated despite some decline in April. The Conference Board's Consumer Confidence index and the University of Michigan's Consumer Sentiment Index remained elevated too.
Moreover, the U.S. economy will get more upside from the government's infrastructure spending. On Nov 15, President Joe Biden signed a bipartisan infrastructure bill of $550 billion in addition to the previously approved funds of $450 billion for five years. Total spending may go up to $1.2 trillion if the plan is extended to eight years.
Our Top Picks
We have narrowed our search to five U.S. corporate behemoths (market capital > $50 billion). These companies have robust business model diversified globally, strong financial position to sustain higher interest rate regime and globally acclaimed brand recognition.
These companies have strong growth potential for the rest of 2022 and have seen positive earnings estimate revisions in the past 30 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
3M seems well-positioned to benefit from its solid product portfolio, marketing activities and shareholder-friendly policies. Healthy businesses in electronic materials, home improvement, manufacturing and healthcare IT will be tailwinds. MMM's ability to generate strong cash flows adds to its strength. For 2022, it anticipates total revenue growth of 1-4%, with organic growth of 2-5%.
In the long term, 3M intends to become more competent on the back of product-portfolio solidification. MMM's household products like Nexcare, Post-it, Scotch, Scotch-Brite and Scotchgard are market leaders in their individual categories.
3M has an expected earnings growth rate of 7.3% for the current year. The Zacks Consensus Estimate for the current year has improved 5.1% over the past 60 days.
Cigna's revenues have been increasing consistently for the past several years, driven by acquisitions, superior operating performance and high-quality products and services portfolio. CI's 2018 buyout of Express Scripts diversified its business by adding pharmacy benefits to insurance operations.
Business streamlining by divesting Group Life and Disability insurance business will help Cigna focus on core growth areas. An expected increase in medical membership bodes well. For 2022, CI expects adjusted income from operations to be at least $22.40 per share.
Cigna has an expected earnings growth rate of 10.7% for the current year. The Zacks Consensus Estimate for the current year has improved 0.7% over the past 60 days.
UnitedHealth Group's top line has been growing and the momentum should continue in the years ahead on the back of a strong market position and an attractive core business that continues to be driven by new deals, renewed agreements and expansion of service offerings.
For this year, UNH expects revenues in the range of $317-$320 billion. UnitedHealth Group's solid health services segment provides diversification benefits. UNH's government business remains well-poised for growth. A sturdy balance sheet enables investments and prudent capital deployment through share buybacks and dividends.
UnitedHealth Group has an expected earnings growth rate of 14.4% for the current year. The Zacks Consensus Estimate for the current year has improved 0.3% over the past 60 days.
Exxon Mobil made multiple world-class oil discoveries at the Stabroek Block, located off the coast of Guyana. XOM raised the estimate for discovered recoverable resources from the Stabroek Block to approximately 10 billion oil-equivalent barrels. The WTI crude oil price is hovering well above $100 per barrel. The price is likely to remain elevated as the Russia-Ukraine clash has intensified.
Exxon Mobil's bellwether status and an optimal integrated capital structure, which have historically led to industry-leading returns make it a relatively lower-risk energy sector play. The integrated oil behemoth expects to reduce greenhouse gas emissions by 30% in its upstream business. By the same time, XOM expects to reduce flaring and methane emissions by 40%.
Exxon Mobil has an expected earnings growth rate of 89% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 37.8% over the past 30 days.
ConocoPhillips holds the bulk of acres in the three big unconventional plays, namely Eagle Ford shale, Delaware basin and Bakken shale, which are rich in oil. COP also has a foothold in Canada's oil sand resources and exposure to developments related to liquefied natural gas.
ConocoPhillips announced an agreement to purchase all Royal Dutch Shell assets in the prolific Permian. The deal reflects COP's aim of broadening its Permian presence. The transaction is highly accretive and involves the acquisition of roughly 225,000 net acres in the heart of the core Delaware basin.
ConocoPhillips has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 24.9% over the past 30 days.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.