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: Microsoft Corp. MSFT, UnitedHealth Group Inc. UNH, HSBC Holdings plc HSBC, IBM Corp. IBM and Honeywell International Inc. HON.

Here are highlights from Monday’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 Microsoft Corp., UnitedHealth Group Inc. and HSBC Holdings plc. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

Microsoft shares have gained +33.1% over the year-to-date period against the Zacks Computer – Software industry’s gain of +34.3%, but have handily outperformed the broader market’s +13.7% gain. The company is benefitting from consistent execution across renewal sales motions, including strong recapture rates and slow yet steady growth in Azure cloud platform amid accelerated global digital transformation.

Solid adoption of ChatGPT, the popular chatbot from OpenAI, remains a tailwind. Slow yet steady performance of Office 365 and Dynamics is aiding user growth thereby driving the top-line. Strength in Marketing Solutions and steady performance in Talent Solutions is driving LinkedIn revenues boosted by recovery in advertising and job market.

However, a slowdown in its cloud business and declining videogame sales are overhangs. Decrease in demand for Xbox content and services and increasing spend on Azure enhancements amid stiff competition in the cloud space remains a concern.

Shares of UnitedHealth have gained +5.9% over the past six months against the Zacks Medical – HMOs industry’s gain of +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’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 via share repurchases and dividends.

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

Shares of HSBC have outperformed the Zacks Banks – Foreign industry over the year-to-date period (+34.2% vs. +12.4%). A strong capital position, high interest rates, an extensive network and business restructuring initiatives will support the company’s prospects going forward.

HSBC is winding down retail operations in France, New Zealand and Canada and fully exiting Russia. These are expected to further help the bank to focus more on the Asia region. While efforts to improve market share in the region will aid financials, these will lead to a rise in expenses. Management expects expenses to increase 3% this year, and the acquisition of SVB UK will likely add another 1% to it.

The worsening macroeconomic operating backdrop is a major headwind. Nonetheless, the company’s strong brand value and widespread network will help it attract more clients. Its capital distributions remain decent.

Other noteworthy reports we are featuring today include IBM Corp. and Honeywell International Inc.
Microsoft Corporation (MSFT): Free Stock Analysis Report

UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report

International Business Machines Corporation (IBM): Free Stock Analysis Report

Honeywell International Inc. (HON): Free Stock Analysis Report

HSBC Holdings plc (HSBC): Free Stock Analysis Report

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Zacks Investment Research

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