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>>>
Today’s Must Read
Higher Rates, Buyouts Aid JPMorgan (JPM), Fee Income a Woe
Elevance’s (ELV) Strategic Buyouts & Product Expansion Aid
Vertex (VRTX) Cystic Fibrosis Sales Up, Non-CF Pipeline Solid
Featured Reports
General Mills (GIS) Gains From Focus on Accelerate Strategy
Per the Zacks analyst, General Mills is gaining from its Accelerate strategy, as part of which it is competing efficiently via brand building, investing in saving initiatives and reshaping portfolio.
AMETEK (AME) Rides on Acquisition Benefits & Organic Growth
Per the Zacks analyst, Magnetrol International and Crank Software buyouts are aiding AMETEK’s Electronic Instruments unit. Strong organic growth is also driving its top-line growth.
Verisk (VRSK) to Gain From Opta Buyout, Low Liquidity Ail
Per the Zacks analyst, the Opta acquisition is expected to expand Verisk’s footprint in the Canadian market. Low liquidity remains a concern.
Paycom Software (PAYC) Benefits From Growing Customer Base
Per the Zacks Analyst, Paycom Software is benefiting from its differentiated employee strategy, measurement capabilities and comprehensive product offerings, that are helping it win new customers.
Quest Diagnostics’ (DGX) Base Business Up Amid Stiff Rivalry
The Zacks analyst is impressed with Quest Diagnostics’ ramping up investments to accelerate growth in the base business. Yet, stiff rivalry remains a concern.
Motion Technologies Segment Benefits ITT, High Costs Hurts
Per the Zacks analyst, ITT will benefit from strength in Motion Technologies segment, led by robust friction OE and rail end markets. The company’s high operating costs remain concerning.
Exelixis’ (EXEL) Cabometyx Strong Amid Stiff Competition
Per the Zacks analyst, lead drug Cabometyx maintains momentum with continued label expansions and the pipeline development is encouraging. However, competition is stiff.
New Upgrades
SONY Benefits From Improving Music & G&NS Segment Sales
Per the Zacks analyst, Sony is gaining from strong performance of its Music and G&NS segments. Also, frequent product launches and strategic collaborations bodes well.
Acquisitions and Expansion Moves Aid Steel Dynamics (STLD)
Per the Zacks analyst, acquisitions will expand the company’s product portfolio and shipping capabilities. Expansion actions should also add to its capacity and boost profitability.
Sunoco (SUN) to Gain From Rising Motor Fuel Sale Volume
Per the Zacks analyst, Sunoco is cashing in on higher motor fuel sale volume, which is being distributed to convenience stores. This will get translated into increased distributable cash flows.
New Downgrades
Range Resources (RRC) Hurt by Debt Load and Rising Costs
The Zacks analyst is concerned since Range Resources has significant exposure to debt capital. Also, rising costs and expenses are hurting its bottom line.
Increased Cat Loss & Elevated Debt Level Hurt Allstate (ALL)
Per the Zacks analyst, exposure to catastrophic events continues to dent underwriting profitability. Rising debts remain a concern as it leads to escalated interest expenses.
Inflationary Pressures Hurt Cracker Barrel’s (CBRL) Prospects
Per the Zacks analyst, Cracker Barre’s operations are likely to be affected by commodity and wage inflation and supply chain challenges. Also, decline in traffic from pre-pandemic levels is a concern.
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JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
General Mills, Inc. (GIS) : Free Stock Analysis Report
Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report
AMETEK, Inc. (AME) : Free Stock Analysis Report
Sony Corporation (SONY) : Free Stock Analysis Report
Elevance Health, Inc. (ELV) : Free Stock Analysis Report
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Source: nz.news.yahoo.com
