The Zacks Analyst Blog Highlights: Microsoft, Facebook, UnitedHealth, Mastercard and ExxonMobil
For Immediate Release
Chicago, IL -February 5, 2019 – 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: MicrosoftMSFT , FacebookFB , UnitedHealthUNH , MastercardMA and ExxonMobilXOM .
Here are highlights from Monday’s Analyst Blog:
Top Stock Reports for Microsoft, Facebook and UnitedHealth
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 Microsoft, Facebook and UnitedHealth. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Microsoft ‘s shares have lost 5% in the past six months, underperforming the Zacks Computer Software industry’s decline of 1.7% during the same period. Microsoft report ed modest second-quarter results. Notably, both top and bottom line increased year over year.
Robust execution and better-than-expected demand from customers for hybrid cloud offerings drove the quarterly results. The Zacks analyst thinks Microsoft is benefiting from growing user base of its different applications like Office 365 commercial, Dynamics, Outlook mobile and Teams.
Moreover, Azure’s expanding customer base is a key catalyst. Microsoft’s gaming segment is performing well, primarily driven by a combination of Xbox Live, Game Pass subscriptions and Mixer, which are driving user engagement. Further, acquisitions like PlayFab and GitHub expand Microsoft’s TAM and penetration.
However, projections of a moderating growth rate in commercial cloud gross margin, and OEM Pro and Windows commercial businesses is a headwind. Also, competition is stiff and its dominant position in the PC market continues to be challenged.
Shares of Buy-ranked Facebook have outperformed the S&P 500 index over the past three months, gaining +11.4% vs. -0.7%. Facebook report ed impressive fourth-quarter 2018 results, driven by solid ad revenues that benefited from impression growth on both Instagram Stories and Feed.
But the Zacks analyst thinks only Instagram Stories is likely to be the key catalyst for impression growth in 2019. Facebook needs to improve ad pricing to drive top-line growth. Further, the company’s plan to introduce commerce in Instagram is expected to be a major growth driver. Additionally, the company’s plan to integrate messaging apps – WhatsApp, Instagram, and Messenger – is expected to take time (not before 2020).
Management believes that the integration will boost user experience by making the services more secure through end-to-end encryption. However, continued mix shift toward Stories is expected to hurt ARPU.
Strong Buy-ranked UnitedHealth ‘s shares have performed nearly in-line with the Zacks Medical Insurance industry’s rally in the past year (up +22.1% vs. +22.5%). UnitedHealth Group’s fourth-quarter 2018 earnings of $3.28 per share beat expectations by 2.5% and increased 27% year over year.
Higher revenues, strength in both segments – UnitedHealthcare and Optum – plus membership growth led to this outperformance. The Zacks analyst likes UnitedHealth’s balance sheet strength, strong operating performance, favorable business profile and solid enterprise risk management. Increased earnings from operations are being driven by higher revenues, appropriate pricing, good medical cost management and operational efficiencies.
The company also benefits from services, technology and innovations from its segment Optum. However, slowdown of growth in international operations, Commercial and Medicare, Part D stand-alone membership, increase in leverage and interest burden and medical care ratio are some headwinds.
Other noteworthy reports we are featuring today include Mastercard and ExxonMobil.
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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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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