January 6, 2025
Chicago, IL – January 6, 2025 – 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: UnitedHealth Group Inc. UNH, Costco Wholesale Corp. COST and International Business Machines Corp. IBM, as well as a micro-cap stock Smith-Midland Corp. SMID
Here are highlights from Friday’s Analyst Blog:
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., Costco Wholesale Corp. and International Business Machines Corp., as well as a micro-cap stock Smith-Midland Corp.. The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
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 have declined -6.1% over the past year against the Zacks Medical - HMOs industry's decline of -9.9%. The company's top line remains poised for growth on the back of a strong market position, new deals, renewed agreements and expansion of service offerings. The company's solid health services segment provides diversification benefits.
The Government business remains well-poised for growth in the future. Adjusted net earnings per share are anticipated to be in the $29.50-$30.00 band in 2025. A sturdy balance sheet enables investments and prudent deployment of capital via share repurchases and dividend payments.
However, membership in its global business continues to be a concern. High operating costs due to rising medical expenses are hurting margins. A debt-laden balance sheet induces an increase in interest expenses. As such, the stock warrants a cautious stance.
(You can read the full research report on UnitedHealth here >>> )
Costco's shares have outperformed the Zacks Retail - Discount Stores industry over the past year (+41.1% vs. +25.1%). The company Being a consumer defensive stock, has been surviving the market turmoil pretty well. The discount retailer's key strengths are strategic investments, a customer-centric approach, merchandise initiatives, and an emphasis on membership growth. These factors have been helping it register decent sales and earnings numbers.
The Zacks analyst expects Costco to register an 11.5% adjusted earnings per share improvement in fiscal 2025 on 6.6% revenue growth. This outlook reflects Costco's ability to navigate the challenging operating environment, generate solid sales, and register high membership renewal rates.
A favorable product mix, steady store traffic, pricing power, and strong liquidity position should help Costco keep outperforming. While trading at a premium to its peers, its long-term growth prospects should help the stock see a solid upside.
(You can read the full research report on Costco here >>> )
Shares of IBM have outperformed the Zacks Computer - Integrated Systems industry over the past year (+41.6% vs. +10.9%). The company is poised to benefit from strong demand for hybrid cloud and AI, driving growth in the Software and Consulting segments. Settlement of ongoing lawsuits with GlobalFoundries will pave the way for future collaboration and exploration of new revenue-generating opportunities.
IBM is collaborating with SAP to tap generative AI technology within the retail industry. The collaboration is likely to facilitate higher productivity and help accelerate business transformation in consumer-packaged goods and retail firms.
However, stiff competition in various end markets is straining profits. Stringent cost-cutting efforts to boost margins beyond a certain threshold are likely to impact product quality. Although the company generates significant cash flow, a high debt level can hinder its ability to sustain dividend payout and impact growth initiatives.
(You can read the full research report on IBM here >>> )
Smith-Midland's shares have outperformed the Zacks Building Products - Concrete and Aggregates industry over the past year (+68.6% vs. +0.2%). This microcap company with market capitalization of $233.51 million has demonstrated record revenue growth, driven by increased production volumes across its plants, especially for infrastructure-related projects.
In the second quarter of 2024, revenues surged 34% year over year to $19.6 million, with a strong $59.2 million backlog supporting continued expansion. The utility segment also showed robust growth, particularly in the Northern Virginia market. The company is strategically positioned with key infrastructure contracts and a solid financial footing, including $7.3 million in cash and a low debt-to-capitalization ratio.
However, concerns include revenue concentration, fluctuating demand in key product lines, exposure to inflation, operational risks and seasonal variability. Rising accounts receivable and the suspension of dividends could strain the company's cash flow and impact investor sentiment.
(You can read the full research report on Smith-Midland here >>> )
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
https://www.zacks.com
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.
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
UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
Smith-Midland Corp. (SMID): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
