Top Research Reports for Berkshire Hathaway, Walt Disney & CVS

Monday, July 11, 2022

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 Berkshire Hathaway Inc. (BRK.B), The Walt Disney Co. (DIS) and CVS Health Corp. (CVS). 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 >>>

Berkshire Hathaway shares have outperformed the Zacks Insurance - Property and Casualty industry over the past year (+0.3% vs. -5.0%). The Zacks analyst believes that Berkshire's inorganic growth story remains impressive with strategic acquisitions.

A strong cash position supports earnings-accretive bolt-on buyouts and indicates the company's financial flexibility. Continued insurance business growth fuels increase in float, drive earnings and generates maximum return on equity. The non-insurance businesses are delivering improved results with increased revenues over the past few years. A sturdy capital level provides further impetus.

However, exposure to catastrophe loss induces earnings volatility and also affects the property and casualty underwriting results of Berkshire. Huge capital expenditures remain a headwind for the company.

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

Walt Disney shares have declined -38.1% over the year to date period against the Zacks Media Conglomerates industry’s decline of -32.0%. The Zacks analyst believes that Disney+’s profitability is expected to be negatively impacted by higher investments in content, which will drive up programming and production costs at Media and Entertainment Distribution. Closure of its Asian theme park due to COVID-19 doesn’t bode well for the Parks, Experiences and Products top-line growth.

Nevertheless, the company benefits from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering. Availability in the Nordics, Latin America and other Asian territories is helping it in expanding user base. Revival in Parks business also hold promise in the long haul.

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

CVS Health shares have outperformed the Zacks Retail - Pharmacies and Drug Stores industry over the past year (+17.7% vs. +4.9%). The Zacks analyst believes that the company’s continued investments to address housing insecurities and enhance access to health care services in underserved communities seem encouraging.

The raised earnings per share (EPS) guidance for 2022 buoys optimism. In fact, CVS Health exited the first quarter of 2022 with earnings and revenues beating the Zacks Consensus Estimate.

Yet, the contraction of margins on escalating costs does not bode well. The decline in operating profit due to the pending litigation with the state of Florida to settle all opioid claims against CVS Health raises apprehension.

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

Other noteworthy reports we are featuring today include Lowe's Companies, Inc. (LOW), Citigroup Inc. (C), and Canadian National Railway Co. (CNI).

Mark Vickery
Senior Editor

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

Berkshire (BRK.B) Continues to Gain From Insurance Business

Disney (DIS) Banks on Disney+ Growth & Reopening of Parks

Robust Pharmacy Sales Aid CVS Health (CVS), Weak Margins Ail

Featured Reports

Lowe's (LOW) Pro Customer Strategy May Help Lift Sales
Per the Zacks analyst, Lowe's pro customer strategy, omni-channel efforts and merchandising initiatives may help boost sales. Pro customer sales increased 20% during the first quarter of fiscal 2022.

Citigroup (C) Progresses on Strategic Sales Amid Rising Costs
Per the Zacks analyst, Citigroup's progress on the consumer banking business exit will help focus on core operations. Yet, revamping technology and risk management framework might elevate expenses.

Dividends & Buyback Aid Canadian National (CNI), Expenses Ail
The Zacks analyst likes the shareholder-friendly measures adopted by Canadian National. However, rising operating expenses are concerning as they are likely to keep the bottom line under pressure.

General Electric (GE) Benefits from Portfolio Restructuring
The Zacks analyst is optimistic about the company's portfolio reshaping actions, which is expected to drive its growth. The company's measures to reward its shareholders are encouraging.

Enterprise (EPD) Banks on $4.6B Major Midstream Projects
Per the Zacks analyst, Enterprise Products' $4.6 billion of major capital projects under construction are likely to provide incremental fee-based revenues.

Momentum in Flash Business to Benefit Pure Storage (PSTG)
Per the Zacks analyst, Pure Storage is expected to benefit from robust demand for FlashArray and FlashBlade businesses. Supply chain woes and stiff competition remain concerns.

Customer Addition, Debt Management Aid UGI Corporation (UGI)
Per the Zacks analyst UGI Corporation's continuous expansion of its customers is increasing demand for its services and efficient debt management will boost its profitability.

New Upgrades

Ingevity (NGVT) Gains on Strong Demand, Capacity Expansion
Per the Zacks analyst, strong demand for engineered polymers and industrial specialties applications will drive Ingevity's top line. It will also gain from its actions to boost production capacity.

Cactus (WHD) to Gain From Higher Wellhead Equipment Sales
The Zacks analyst is upbeat about Cactus' higher sales of wellhead and production-related equipment due to rising customer drilling activity. This will get translated into increased cashflows.

Strong E-commerce Demand Aids Air Transport Services (ATSG)
The Zacks analyst is impressed with upbeat e-commerce demand. Strong performance of the Cargo Aircraft Management unit is an added positive.

New Downgrades

Declining Demand For COVID-19 Treatments Impact Roche (RHHBY)
Per the Zacks analyst, reduced demand for its COVID-19 medicines and diagnostics, which fuelled growth in 2021 will impact Roche in 2022. Biosimilar competition for drugs weighs on performance as well

Rising Expenses & Declining Bitcoin Revenues Hurt Block (SQ)
Per the Zacks analyst, Block is suffering from increasing product development and Cash App marketing expenses. Also, declining bitcoin revenues due to slowdown in trading activities are concerns.

Inflationary Pressure & Higher Input Cost Hurt Otis (OTIS)
Per the Zacks analyst, Otis has been witnessing intense inflation, higher cost of the input and higher research and development expenses.

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Citigroup Inc. (C) : Free Stock Analysis Report
 
Canadian National Railway Company (CNI) : Free Stock Analysis Report
 
Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report
 
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
 
CVS Health Corporation (CVS) : Free Stock Analysis Report
 
The Walt Disney Company (DIS) : Free Stock Analysis Report
 
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