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The Zacks Analyst Blog Highlights: VMware, Schwab, HCA Healthcare, Cognizant and Hilton

Zacks Equity Research

For Immediate Release

Chicago, IL – July 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:VMware VMW, Schwab SCHW, HCA Healthcare HCA, Cognizant CTSH and Hilton HLT.

Here are highlights from Wednesday’s Analyst Blog:

Top Research Reports for VMWare, Schwab an HCA Healthcare

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 VMware, Schwab and HCA Healthcare. 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 >>>

VMware’s shares have gained +21.9% year to date, underperforming the Zacks Software industry which is up +32.5% over the same period. The Zacks analyst thinks VMware is benefiting from robust demand for NSX, VeloCloud and vSAN product lines.

The company’s dominance in the software-defined data center (SDDC) domain and an expanding customer base in cloud, driven by partnerships with the likes of IBM and AWS, are positives. Microsoft and VMware are also exploring initiatives to boost integration between VMware infrastructure and Azure. These partnerships are major growth drivers for the company in the long haul.

Nevertheless, growth in license bookings has been muted for the last few quarters, owing to customer delays and macro-economic weakness in some key regions. Moreover, VMware’s margins are expected to remain under pressure due to heavy spending. Intensifying competition is also a concern.

Shares of Schwab have underperformed the Zacks Investment Brokers industry over the past six months, declining -5.3% vs. +4.4%. The company's earnings have surpassed expectations in each of the trailing four quarters.

The Zacks analyst thinks the company remains well positioned to gain from higher interest rates, strong balance sheet and efforts to strengthen trading business. Moreover, the company’s initiatives to improve operating efficiency will go a long way to support profitability.

Its steady capital deployment actions are commendable and will enhance shareholder value. However, continuously rising operating expenses (mainly related to compensation costs and regulatory charges) are likely to hurt bottom-line growth to some extent. Further, the company’s dependence on fee-based revenues remains a major concern, and this might hamper financials going forward.

HCA Healthcare’s shares have outperformed the Zacks Hospital industry in the past year, gaining +30.1% vs. +14.4%. Moreover, it has witnessed its 2020 earnings estimates move north over the past 30 days. Its top line has been growing over the last several quarters on the back of higher admissions, same facility emergency room growth and surgical growth, etc.

The Zacks analyst thinks multiple acquisitions have helped the company gain a strong foothold in the industry, fueling its inorganic growth. A strong balance sheet and free cash flow are other positives for the company. Bullish 2019 guidance should instill investor’s confidence in the stock.

However, high operating expenses due to salaries and benefits and other costs are persistently weighing on margins. It is expected to witness a rise in costs due to constant growth-related investments. High leverage is another concern for the company.

Other noteworthy reports we are featuring today include Cognizant and Hilton.

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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 https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Cognizant Technology Solutions Corporation (CTSH) : Free Stock Analysis Report
 
VMware, Inc. (VMW) : Free Stock Analysis Report
 
The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report
 
Hilton Worldwide Holdings Inc. (HLT) : Free Stock Analysis Report
 
HCA Healthcare, Inc. (HCA) : Free Stock Analysis Report
 
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