Friday, March 18, 2022
The Zacks Research Daily presents the best research output of our analyst team. Today’s Research Daily features new research reports on 12 major stocks, including PayPal Holdings, Inc. (PYPL), HCA Healthcare, Inc. (HCA) and Aon plc (AON). 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 >>>
PayPal shares have declined -53.6% over the past year against the Zacks Internet – Software industry’s decline of -48.8%. The Zacks analyst believes that intensifying competition in the digital payment market poses a serious risk to the company’s market position. Also, foreign exchange headwinds remain concerns.
However, PayPal continues to benefit from robust growth in total payments volume owing to increasing net new active accounts. Further, strengthening customer engagement on the company’s platform is a major positive.
Venmo’s improving monetization efforts and rising adoption rate across various platforms are aiding the total active accounts growth. Additionally, solid momentum of core peer to peer and PayPal Checkout experiences is a tailwind.
Shares of HCA Healthcare have outperformed the Zacks Medical – Hospital industry over the past year (+39.9% vs. +29.1%). The Zacks analyst believes that the company’s revenues are bouncing back, courtesy of a surge in admissions, outpatient surgeries and other procedures.
Multiple buyouts have helped it increase patient volumes, enabled network expansion and added hospitals to its portfolio. Its solid 2022 outlook impresses. Outpatient revenues are estimated to grow in the mid-to-high single digits. Its Capex guidance is projected at $4.2 billion for this year. It also authorized a new $8B share buyback plan to boost shareholder value.
However, its escalating operating expenses persistently weigh on the margins. Moreover, its lack of financial solvency is bothersome. Its long-term debt has been increasing since 2011. Also, the company’s free cash flow dropped 15.9% year over year in 2021.
Shares of Aon have outperformed the Zacks Insurance – Brokerage industry over the past year (+41.2% vs. +22.4%). The Zacks analyst believes that Aon’s top line has been growing on buyouts and collaborations, which have enhanced its capabilities and made it one of the largest insurance brokers.
Solid contributions from Reinsurance Solutions, Commercial Risk Solutions, Health Solutions and Wealth Solutions segments continue to drive the company’s top-line growth. It has been divesting non-core operations to streamline its business. The firm expects that focusing on more profitable operations will generate a higher return on equity.
However, elevated operating expenses can put pressure on margins. Its high long-term debts compared with a lower cash balance raise concerns about solvency level. Exposure to forex bothers.
Other noteworthy reports we are featuring today include AutoZone (AZO), TE Connectivity (TEL) and Best Buy (BBY).
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
Investment Aids Ormat (ORA), Weak Solvency Pose Threat
Per the Zacks analyst, Ormat Technologies’ investment in manufacturing capacity should boost growth. Yet, its weak solvency position threatens the stock’s ability to pay off its debt obligations.
AutoZone (AZO) Buoyed by Sales Growth Despite Cost Woes
While high-quality products, store-expansion moves and omni-channel efforts are fueling AutoZone’s sales, the Zacks analyst is worried about high commodity and SG&A costs, which may dent profits.
Communication Solutions Strength Aids TE Connectivity (TEL)
Per the Zacks analyst, solid content growth in high-speed cloud applications and strength across data center are driving growth in TE Connectivity’s Communication segment.
Best Buy’s (BBY) Omni-Channel Efforts Seem Encouraging
Per the Zacks analyst, Best Buy focuses on improving omnichannel services, including digital strength. These efforts will continue boosting the company’s sales and overall profitability.
Strong Demand, Sunlight Supply Aid Scotts Miracle-Gro (SMG)
Per the Zacks analyst, the company should gain from higher demand across its product categories and synergies of the Sunlight Supply buyout amid headwind from higher commodity costs.
Ryder (R) Gains on Strong 2022 Guidance and Freight Market
Per the Zacks analyst, improving freight conditions in the United States boost Ryder. Upbeat 2022 EPS outlook owing to factors like favorable pricing and volume growth are also aiding.
AutoNation (AN) Gains From Digitization & Cost Discipline
AutoNation looks to benefit from enhanced digitization efforts in its omni-channel marketing. Cost discipline is likely to aid margins. Per the Zacks analyst, the stock is up for a long-run momentum.
Debt & Nil Dividend Payout are Envestnet’s (ENV) Tailwinds
The Zacks analyst is pessimistic about the facts that Envestnet has more debt outstanding than cash and no plan to payout cash dividend.
COVID-led Disruptions & Competition Hurt TripAdvisor (TRIP)
Per a Zacks analyst, TripAdvisor is suffering from disruptions led by rapidly spreading Omicron variant of coronavirus. Further, competition in the online booking space is a headwind.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.