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The Zacks Analyst Blog Highlights Tesla, Exxon Mobil, Marriott International, Humana and Visa
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For Immediate Release
Chicago, IL – August 30, 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: Tesla Inc. (TSLA - Free Report) , Exxon Mobil Corp. (XOM - Free Report) , Marriott International Inc. (MAR - Free Report) , Humana Inc. (HUM - Free Report) and Visa Inc. (V - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Forget a Meltdown, Each Dip Offers a Solid Entry Point
On Aug 26, Wall Street suffered a bloody blow, ending the summer rally that U.S. stock markets saw from mid-June to mid-August. The Dow, the S&P 500 and the Nasdaq Composite plummeted 3%, 3.4% and 3.9%, respectively, following a stern message from Fed Chairman Jerome Powell at the annual Jackson Hole Symposium.
At this stage, investors should patiently wait and reallocate their portfolios for mid-to-long-term gains instead of immediate profits. Each and every dip provides a solid opportunity to enter the market. With respect to the buy-on-dip strategy, we present five U.S. corporate giants with strong fundamentals and a favorable Zacks Rank. These companies are — Tesla Inc., Exxon Mobil Corp., Marriott International Inc., Humana Inc. and Visa Inc..
Buy on Every Dip as US Fundamentals Remain Solid
Powell reiterated that the central bank would pursue aggressive interest rate hikes and tighter monetary control policies until inflation comes down to at least near its 2% target level. Market participants are expecting more softness in consumer spending and a decline in business spending due to margin squeeze resulting in negative-to-moderate GDP growth. Fed Chairman has also warned of some toughness going forward.
However, the fundamentals of the U.S. economy remain solid and the recent downtrend in GDP growth was purely Fed-induced. The central bank wants the economy to cool down to some extent to bring back inflation to an acceptable level. So, the U.S. economy should be back on the growth trajectory once monetary policies return to normalcy.
U.S. stock markets are the best destinations for investors. The gigantic size of the U.S. economy has given it a clear upper hand over the European and emerging markets. Furthermore, technological innovation and superiority have always been the pillars of U.S. economic strength.
The U.S. economy also has several future catalysts. On Aug 16, 2022, President Joe Biden signed a $430 billion Inflation Reduction Act. The size of the allotted money may rise up to $737 billion in 10 years. The act has provisions of $390 billion to combat climate change. Per the Biden administration, the most important way to restore a clean climate is to encourage Americans to shift toward electric vehicles.
On Aug 10, 2022, President Biden signed the CHIPS and Science Act that will provide $52.7 billion to microprocessor developers for five years. On Nov 15, 2021, the President had signed a bipartisan infrastructure act of $550 billion in addition to the previously approved funds of $450 billion for five years. The law aims at establishing the United States with the world's best economic infrastructure. Total spending may go up to $1.2 trillion if the plan is extended to eight years.
Investment Strategy
At this stage, several stocks look attractive for future growth. However, selecting stocks on the basis of the following three criteria will make the task easy. First, choose U.S. corporate bigwigs (market capital > $50 billion) with a well-established business model, globally acclaimed brand recognition and robust financial condition.
Second, look for stocks that have strong growth potential for 2022 and an impressive long-term (estimated 3-5 years) growth rate, which is well above the market's benchmark S&P 500 Index's long-term growth rate of 11.4%.
Third, pick stocks that carry either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here. Allocate funds among these stocks and purchase them in parts at every dip to make an effective cost average.
Our Top Picks
Based on the above-mentioned investment strategy, we have narrowed our search to five U.S. corporate behemoths to buy-on-the-dip to generate handsome profits in the mid-to-long-term.
Tesla is likely to be the largest beneficiary of the U.S. Government's clean climate initiatives. Increasing Model 3 delivery, which forms a significant chunk of Tesla's overall deliveries, is aiding its top line. Along with Model 3, Model Y is contributing to its revenues. The global auto industry is gradually moving toward electric vehicles. TSLA is expected to be the largest beneficiary of this trend.
Tesla has an expected revenue and earnings growth rate of 58.2% and 65%, respectively, for the current year. Moreover, it has a long-term earnings growth rate of 31.2%. The electric vehicle marker posted positive earnings surprises in the last four reported quarters, with an average beat of 32.2%.
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 giant expects to reduce greenhouse gas emissions by 30% in its upstream business. By then, XOM expects to reduce flaring and methane emissions by 40%. As the global economy has reopened, crude oil prices are likely to remain high despite near-term growth concerns.
Exxon Mobil has an expected revenue and earnings growth rate of 50.9% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the last 30 days.
XOM has a long-term earnings growth rate of 24.1% and a current dividend yield of 3.6%. The crude oil behemoth recorded positive earnings surprises in three out of the last four reported quarters, with an average beat of 1.6%.
Marriott International is gaining from the reopening of the international borders and leniency in travel restrictions. Several countries are gradually removing travel restrictions. MAR is consistently expanding its worldwide presence and capitalizing on the demand for hotels in international markets.
Marriott International has an expected revenues and earnings growth rate of 46.1% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings improved 5.1% over the last 30 days.
MAR has a long-term earnings growth rate of 40.1% and a current dividend yield of 0.8%. The hotel giant recorded a positive earnings surprise in the last four reported quarters, with an average beat of 18.6%.
Visa has been benefiting from expanding business volumes as pandemic-induced restrictions have mostly been withdrawn globally. Investments in technology are solidifying Visa's position in the payments market. A shift in payments to the digital mode is a boon for Visa. Backed by its strong cash position, V remains committed to boosting its shareholder value.
Visa has an expected revenue and earnings growth rate of 11% and 13.2%, respectively, for next year (ending September 2023). The Zacks Consensus Estimate for next-year earnings improved 0.2% over the last 30 days.
V has a long-term earnings growth rate of 16.7% and a current dividend yield of 0.7%. The global technology-driven payment operator recorded a positive earnings surprise in the last four reported quarters, with an average beat of 8.8%.
Humana's Medicaid business, buoyed by several contract wins and renewals, has been strongly contributing to its top line for years. Buyouts and alliances place HUM well for growth. Humana has been deploying excess capital for several years on balance sheet strength. HUM's solid contributions from the Retail and Healthcare Services units are its major positives.
Humana has an expected revenues and earnings growth rate of 11.9% and 20.4%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings improved 0.7% over the last 30 days.
HUM has a long-term earnings growth rate of 13.4% and a current dividend yield of 0.6%. The leading healthcare plan provider registered positive earnings surprises in the last four reported quarters, with an average beat of 9.1%.
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 Tesla, Exxon Mobil, Marriott International, Humana and Visa
For Immediate Release
Chicago, IL – August 30, 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: Tesla Inc. (TSLA - Free Report) , Exxon Mobil Corp. (XOM - Free Report) , Marriott International Inc. (MAR - Free Report) , Humana Inc. (HUM - Free Report) and Visa Inc. (V - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Forget a Meltdown, Each Dip Offers a Solid Entry Point
On Aug 26, Wall Street suffered a bloody blow, ending the summer rally that U.S. stock markets saw from mid-June to mid-August. The Dow, the S&P 500 and the Nasdaq Composite plummeted 3%, 3.4% and 3.9%, respectively, following a stern message from Fed Chairman Jerome Powell at the annual Jackson Hole Symposium.
At this stage, investors should patiently wait and reallocate their portfolios for mid-to-long-term gains instead of immediate profits. Each and every dip provides a solid opportunity to enter the market. With respect to the buy-on-dip strategy, we present five U.S. corporate giants with strong fundamentals and a favorable Zacks Rank. These companies are — Tesla Inc., Exxon Mobil Corp., Marriott International Inc., Humana Inc. and Visa Inc..
Buy on Every Dip as US Fundamentals Remain Solid
Powell reiterated that the central bank would pursue aggressive interest rate hikes and tighter monetary control policies until inflation comes down to at least near its 2% target level. Market participants are expecting more softness in consumer spending and a decline in business spending due to margin squeeze resulting in negative-to-moderate GDP growth. Fed Chairman has also warned of some toughness going forward.
However, the fundamentals of the U.S. economy remain solid and the recent downtrend in GDP growth was purely Fed-induced. The central bank wants the economy to cool down to some extent to bring back inflation to an acceptable level. So, the U.S. economy should be back on the growth trajectory once monetary policies return to normalcy.
U.S. stock markets are the best destinations for investors. The gigantic size of the U.S. economy has given it a clear upper hand over the European and emerging markets. Furthermore, technological innovation and superiority have always been the pillars of U.S. economic strength.
The U.S. economy also has several future catalysts. On Aug 16, 2022, President Joe Biden signed a $430 billion Inflation Reduction Act. The size of the allotted money may rise up to $737 billion in 10 years. The act has provisions of $390 billion to combat climate change. Per the Biden administration, the most important way to restore a clean climate is to encourage Americans to shift toward electric vehicles.
On Aug 10, 2022, President Biden signed the CHIPS and Science Act that will provide $52.7 billion to microprocessor developers for five years. On Nov 15, 2021, the President had signed a bipartisan infrastructure act of $550 billion in addition to the previously approved funds of $450 billion for five years. The law aims at establishing the United States with the world's best economic infrastructure. Total spending may go up to $1.2 trillion if the plan is extended to eight years.
Investment Strategy
At this stage, several stocks look attractive for future growth. However, selecting stocks on the basis of the following three criteria will make the task easy. First, choose U.S. corporate bigwigs (market capital > $50 billion) with a well-established business model, globally acclaimed brand recognition and robust financial condition.
Second, look for stocks that have strong growth potential for 2022 and an impressive long-term (estimated 3-5 years) growth rate, which is well above the market's benchmark S&P 500 Index's long-term growth rate of 11.4%.
Third, pick stocks that carry either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here. Allocate funds among these stocks and purchase them in parts at every dip to make an effective cost average.
Our Top Picks
Based on the above-mentioned investment strategy, we have narrowed our search to five U.S. corporate behemoths to buy-on-the-dip to generate handsome profits in the mid-to-long-term.
Tesla is likely to be the largest beneficiary of the U.S. Government's clean climate initiatives. Increasing Model 3 delivery, which forms a significant chunk of Tesla's overall deliveries, is aiding its top line. Along with Model 3, Model Y is contributing to its revenues. The global auto industry is gradually moving toward electric vehicles. TSLA is expected to be the largest beneficiary of this trend.
Tesla has an expected revenue and earnings growth rate of 58.2% and 65%, respectively, for the current year. Moreover, it has a long-term earnings growth rate of 31.2%. The electric vehicle marker posted positive earnings surprises in the last four reported quarters, with an average beat of 32.2%.
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 giant expects to reduce greenhouse gas emissions by 30% in its upstream business. By then, XOM expects to reduce flaring and methane emissions by 40%. As the global economy has reopened, crude oil prices are likely to remain high despite near-term growth concerns.
Exxon Mobil has an expected revenue and earnings growth rate of 50.9% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the last 30 days.
XOM has a long-term earnings growth rate of 24.1% and a current dividend yield of 3.6%. The crude oil behemoth recorded positive earnings surprises in three out of the last four reported quarters, with an average beat of 1.6%.
Marriott International is gaining from the reopening of the international borders and leniency in travel restrictions. Several countries are gradually removing travel restrictions. MAR is consistently expanding its worldwide presence and capitalizing on the demand for hotels in international markets.
Marriott International has an expected revenues and earnings growth rate of 46.1% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings improved 5.1% over the last 30 days.
MAR has a long-term earnings growth rate of 40.1% and a current dividend yield of 0.8%. The hotel giant recorded a positive earnings surprise in the last four reported quarters, with an average beat of 18.6%.
Visa has been benefiting from expanding business volumes as pandemic-induced restrictions have mostly been withdrawn globally. Investments in technology are solidifying Visa's position in the payments market. A shift in payments to the digital mode is a boon for Visa. Backed by its strong cash position, V remains committed to boosting its shareholder value.
Visa has an expected revenue and earnings growth rate of 11% and 13.2%, respectively, for next year (ending September 2023). The Zacks Consensus Estimate for next-year earnings improved 0.2% over the last 30 days.
V has a long-term earnings growth rate of 16.7% and a current dividend yield of 0.7%. The global technology-driven payment operator recorded a positive earnings surprise in the last four reported quarters, with an average beat of 8.8%.
Humana's Medicaid business, buoyed by several contract wins and renewals, has been strongly contributing to its top line for years. Buyouts and alliances place HUM well for growth. Humana has been deploying excess capital for several years on balance sheet strength. HUM's solid contributions from the Retail and Healthcare Services units are its major positives.
Humana has an expected revenues and earnings growth rate of 11.9% and 20.4%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings improved 0.7% over the last 30 days.
HUM has a long-term earnings growth rate of 13.4% and a current dividend yield of 0.6%. The leading healthcare plan provider registered positive earnings surprises in the last four reported quarters, with an average beat of 9.1%.
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.