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Top Research Reports for UnitedHealth Group, Merck & Texas Instruments

Thursday, May 11, 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 Inc. (UNH), Merck & Co., Inc. (MRK) and Texas Instruments Inc. (TXN). 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 +3.8% over the past year against the Zacks Medical - HMOs industry’s gain of +5.7%. The company’s top line remains well-poised for growth on the back of a strong market position, new deals, renewed agreements and expansion of service offerings.

UnitedHealth Group’s solid health services segment provides diversification benefits. The Government business remains well-poised for growth. A sturdy balance sheet enables business investments and prudent deployment of capital.

However, the membership in its global business continues to decline. High operating costs are hurting margins. As such, the stock warrants a cautious stance.

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

Merck’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+33.7% vs. +16.5%). Company’s products like Keytruda and Gardasil have been driving sales. With continued label expansion into new indications & early-stage settings, Keytruda is expected to remain a key top-line driver.

Animal health and vaccine products are core growth drivers. Merck boasts a strong cancer pipeline, including Keytruda, which should drive long-term growth. Merck is investing in M&A activity to strengthen its pipeline.

However, generic competition for several drugs and rising competitive pressure, mainly on the diabetes franchise, will continue to be overhangs on the top line. There are concerns about Merck’s ability to grow its non-oncology business ahead of Keytruda’s loss of exclusivity later in the decade.

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

Shares of Texas Instruments have gained +1.1% over the past year against the Zacks Semiconductor - General industry’s gain of +35.0%. Growing demand for embedded technologies across the automotive and industrial markets contributed well. Additionally, continued rebound in the automotive market was a tailwind.

The Zacks analyst believes that the company’s growing investments in new growth avenues and competitive advantages remain tailwinds. Further, its portfolio of long-lived products and efficient manufacturing strategies are other positives.

However, sluggishness in the Analog segment remains a concern. Further, weakening momentum across personal electronics and communication equipment end-markets is a negative. Additionally, pandemic-led supply-chain disruptions and imposition of new export regulations are headwinds.

(You can read the full research report on Texas Instruments here >>>)

Other noteworthy reports we are featuring today include The TJX Companies, Inc. (TJX), The Southern Co, (SO) and Johnson Controls International plc (JCI).

Senior Editor
Mark Vickery

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

Solid Top Line & Strong Cash Flows Drive UnitedHealth (UNH)

Keytruda to Remain Merck's (MRK) Key Top Line Driver

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Embedded Processing Strength Aids Texas Instruments (TXN)

Featured Reports

Online Growth to Fuel TJX Companies (TJX), High Costs a Woe
Per the Zacks analyst, TJX Companies is set to keep gaining from robust efforts to boost online sales. However, increased supply-chain cost is likely to persist.

Southern Company (SO) Buoyed by Regulated Customer Growth
The Zacks analyst believes that increase in Southern's regulated business customer base will support its revenue growth but is concerned over timing and cost overrun related to Vogtle project.

HVAC & Controls Backs Johnson Controls (JCI) Amid Cost Woes
Per the Zacks analyst, continued demand for HVAC & Controls within the Building Solutions North America segment augurs well for the company. However, cost-inflation poses a threat to its bottom line.

Surgical Sales Rebound Aids Alcon (ALC), Margin Issues Stay
The Zacks analyst is relieved by the market recovery and strong global ATIOL penetrations within Alcon's Surgical business. Yet, mounting expenses are putting pressure on margins.

Investments Aid Edison International (EIX), Rising Costs Ail
Per the Zacks analyst, systematic capital investment boosts Edison International's infrastructure and customer reliability. Yet, rising wildfire related charges are hurting its bottom line.

Southwest Airlines (LUV) Rides on Air Travel Demand, Costs Ail
The Zacks analyst is impressed with the fact that increased air-travel demand is aiding Southwest Airlines' top-line performance. However, rising fuel costs continue to weigh on the bottom line.

Akamai (AKAM) Rides on Product Innovation & Customer Growth
Per the Zacks analyst, rising demand for cloud computing solutions combined with Akamai's approach of product innovation and strategic acquisition are likely to boost commercial expansion.

New Upgrades

Solid Public Demand & Strategic Initiatives Aid Vulcan (VMC)
Per the Zacks analyst, robust public sector demand aids Vulcan. Also, strong pricing, fixed cost leverage and operating efficiencies adds to the tailwinds.

EMCOR (EME) Rides on Robust Construction Activity & Buyouts
Per the Zacks analyst, robust construction activity, mainly in the non-residential markets, along with aggressive acquisitions will help EMCOR to drive profit.

Dril-Quip (DRQ) Banks on Key Offshore & Reemerging Markets
The Zacks analyst is bullish on Dril-Quip as the highly engineered equipment manufacturer continues to bank on key offshore markets, like Brazil and the Middle East and some reemerging areas.

New Downgrades

Lincoln National (LNC) Weak on High Costs, Poor Life Business
Per the Zacks Analyst, a high benefits expense level can dampen the company's margins. Lower prepayment income and struggling life insurance business are a concern for Lincoln National.

Persistently Rising Expenses to Hurt Schwab's (SCHW) Profits
Per the Zacks analyst, Schwab's expenses are likely to remain elevated in the near term due to its inorganic growth efforts. Thus, higher costs are expected to hurt the bottom line to an extent.

High Costs, Worsening Operating Backdrop Hurt KeyCorp (KEY)
Per the Zacks analyst, steadily rising costs, mainly due to buyouts and technological upgrades, will likely keep hurting KeyCorp. Worsening economic backdrop amid higher interest rates is a headwind.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Southern Company (The) (SO) : Free Stock Analysis Report

Texas Instruments Incorporated (TXN) : Free Stock Analysis Report

UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report

Merck & Co., Inc. (MRK) : Free Stock Analysis Report

The TJX Companies, Inc. (TJX) : Free Stock Analysis Report

Johnson Controls International plc (JCI) : Free Stock Analysis Report

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Zacks Investment Research