It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +24% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Travelers (TRV - Free Report) Established in 1853 and is based in New York, NY, The Travelers Companies Inc., a holding company, is principally engaged, through its subsidiaries, in providing a wide variety of property and casualty insurance and surety products and services to businesses, organizations and individuals in the United States. and select international markets.
TRV is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Additionally, the company could be a top pick for growth investors. TRV has a Growth Style Score of B, forecasting year-over-year earnings growth of 1.5% for the current fiscal year.
For fiscal 2026, eight analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.30 to $28.00 per share. TRV boasts an average earnings surprise of +40.4%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, TRV should be on investors' short list.
PGA TOUR Signature Event features all but one of the eligible top 50 players in the world
HARTFORD, Conn.--(BUSINESS WIRE)--The Travelers Companies, Inc. (NYSE: TRV) today announced the start of the 2026 Travelers Championship at TPC River Highlands in Cromwell, Connecticut – a PGA TOUR Signature Event and the 20th consecutive tournament with the company serving as title sponsor.
The year’s field features all but one of the eligible top 50 players in the Official World Golf Ranking, including: Scottie Scheffler (No. 1); Cameron Young (No. 3); Matt Fitzpatrick (No. 4); Russell Henley (No. 5); Justin Rose (No. 6); Tommy Fleetwood (No. 7); Wyndham Clark (No. 8); Collin Morikawa (No. 9); and defending champion Keegan Bradley.
“The Travelers Championship is a world-class golf tournament with a powerful local impact,” said Alan Schnitzer, Chairman and Chief Executive Officer of Travelers. “From our dedicated hometown volunteers and legendary Connecticut crowd, to the significant contribution to worthy causes throughout the Northeast and the state’s economy, it’s the community spirit that sets this event apart.”
Since Travelers became title sponsor in 2007, the tournament has generated tens of millions of dollars for more than 1,000 local and regional charities. Last year, the Travelers Championship distributed more than $4 million to nearly 250 charities, setting new tournament records.
The Hole in the Wall Gang Camp, based in Ashford, Connecticut, is this year’s primary beneficiary. The organization provides a traditional summer camp experience for children with serious illnesses. Many other nonprofits – spanning arts and culture, education, food insecurity, healthcare, housing, human services, mental health, and science and technology – will benefit through the Travelers Championship’s Birdies for Charity program.
“There is an energy at the Travelers Championship that you cannot find anywhere else,” said Andy Bessette, Executive Vice President and Chief Administrative Officer of Travelers. “This tournament has become part of the fabric of Connecticut, and the more it grows, the more money we can generate for important causes across the region. Giving back to the community that has embraced us for so many years is what drives us to make every year better than the last.”
The 2026 Travelers Championship will offer a $20 million purse and feature 72 players competing for all four rounds, beginning Thursday, June 25. Ticketed spectators will be allowed on-site starting Wednesday, June 24.
NBC will be this year’s weekend broadcast network, with live tournament coverage Saturday, 3 to 6 p.m. ET, and Sunday, 4 to 7 p.m. ET. Golf Channel will provide coverage Thursday and Friday, 3 to 6 p.m. ET, Saturday, 1 to 3 p.m. ET, and Sunday, 2 to 4 p.m. ET. PGA TOUR Live on ESPN+ will offer live access to marquee and featured groups, as well as certain holes, Thursday through Sunday. The event can also be streamed on Peacock and the Golf Channel app.
For more information about the Travelers Championship, visit TravelersChampionship.com. Fans can also follow the tournament’s social media channels on X, Facebook, Instagram, LinkedIn and TikTok for news and information.
About Travelers
The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. A component of the Dow Jones Industrial Average, Travelers has more than 30,000 employees and generated revenues of more than $49 billion in 2025. For more information, visit Travelers.com.
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
#1 (Strong Buy) stocks have produced an unmatched +24% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Travelers (TRV - Free Report) Established in 1853 and is based in New York, NY, The Travelers Companies Inc., a holding company, is principally engaged, through its subsidiaries, in providing a wide variety of property and casualty insurance and surety products and services to businesses, organizations and individuals in the United States. and select international markets.
TRV is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Finance stock. TRV has a Momentum Style Score of A, and shares are up 1.4% over the past four weeks.
Four analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.17 to $28.00 per share. TRV also boasts an average earnings surprise of +40.4%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, TRV should be on investors' short list.
In the latest trading session, IBM (IBM - Free Report) closed at $252.22, marking a +1.25% move from the previous day. This move outpaced the S&P 500's daily loss of 0.37%. Meanwhile, the Dow gained 0.29%, and the Nasdaq, a tech-heavy index, lost 1.33%.
Coming into today, shares of the technology and consulting company had lost 1.87% in the past month. In that same time, the Computer and Technology sector gained 4.52%, while the S&P 500 gained 2.02%.
The upcoming earnings release of IBM will be of great interest to investors. The company's earnings report is expected on July 22, 2026. In that report, analysts expect IBM to post earnings of $2.95 per share. This would mark year-over-year growth of 5.36%. Simultaneously, our latest consensus estimate expects the revenue to be $17.86 billion, showing a 5.2% escalation compared to the year-ago quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $12.38 per share and a revenue of $71.53 billion, signifying shifts of +6.82% and +5.92%, respectively, from the last year.
Investors might also notice recent changes to analyst estimates for IBM. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.11% decrease. IBM is currently sporting a Zacks Rank of #3 (Hold).
From a valuation perspective, IBM is currently exchanging hands at a Forward P/E ratio of 20.12. This signifies a discount in comparison to the average Forward P/E of 28.47 for its industry.
We can also see that IBM currently has a PEG ratio of 2.58. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. IBM's industry had an average PEG ratio of 1.03 as of yesterday's close.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 16, which puts it in the top 7% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
President Trump’s latest push into quantum computing is arriving at an interesting moment. Global technology stocks are under pressure, with weakness spreading across markets overseas and into U.S. premarket trading. Yet one corner of the tech sector is moving in the opposite direction.
Quantum computing stocks are posting gains despite the broader sell-off. According to premarket trading data, D-Wave Quantum (NYSE:QBTS) is up 4%, Rigetti Computing (NASDAQ:RGTI) is gaining 2%, IonQ (NYSE:IONQ | IONQ Price Prediction) is rising 1%, and IBM (NYSE:IBM) has advanced 4.5% so far.
The catalyst is Washington’s growing commitment to quantum technology. President Trump just signed two executive orders designed to accelerate development of advanced quantum systems while preparing the government for the security challenges those systems may create.
Trump Accelerates the Quantum Race Trump’s first executive order directs federal agencies to work with private industry and academic institutions to deploy a quantum computer capable of supporting scientific research by 2028.
The second order recognizes a different reality: quantum computers may soon become powerful enough to crack many forms of traditional encryption. Federal agencies and security experts are being directed to prepare for that possibility sooner than previously expected.
The orders arrive alongside billions of dollars in Commerce Department funding earmarked for quantum-related companies. They also build on a separate $2 billion federal investment initiative spread across nine quantum computing stocks, with IBM receiving roughly half of that funding.
The message is clear: Artificial intelligence may dominate today’s headlines, but quantum computing is becoming a strategic national priority.
For investors, government support matters because quantum computing remains an emerging industry with limited commercial revenue today. Federal contracts and research funding help bridge the gap between promising technology and profitable businesses.
IBM is different. The company generated nearly $69 billion in revenue over the last 12 months and remains profitable across its software, consulting, and infrastructure businesses. Quantum computing is only one part of a much larger enterprise.
Here’s how several major quantum players compare:
Company Approximate Premarket Move Business Profile IBM +4.5% Diversified technology leader with profitable operations IonQ +1% Pure-play quantum company with commercial partnerships D-Wave Quantum +4% Focused on quantum annealing systems Rigetti Computing +2% Early-stage quantum hardware developer To be clear, IBM isn’t likely to deliver the explosive upside some smaller quantum names might generate. But it also carries far less financial risk. That’s an attractive combination in a sector where many companies are still proving their business models.
That said, IonQ deserves consideration as a runner-up. The company is widely viewed as one of the leaders among pure-play quantum firms and has established partnerships across government and enterprise markets. If investors want more direct exposure to the technology itself, IonQ appears ahead of many competitors.
Why the Quantum ETF Isn’t Following the Stocks Higher Surprisingly, the Corgi Quantum Computing ETF (NASDAQ:CQTM) is down about 2% in premarket trading even as several leading quantum stocks gained. Similarly, The Defiance Quantum ETF (NASDAQ:QTUM) is down 2.6%. The reason comes down to portfolio construction.
According to the fund’s fact sheet, Corgi owns 18 stocks tied to the quantum computing industry. Its largest positions include IonQ and D-Wave Quantum, which each account for roughly 20% of assets. IBM, despite today’s strong move, represents only about 4% of the portfolio and ranks as the fund’s ninth-largest holding.
The ETF also owns smaller quantum companies that aren’t participating in today’s rally. Meanwhile, Honeywell (NASDAQ:HON), its seventh-largest position, was trading modestly lower.
ETFs are often marketed as a safer way to gain exposure to emerging industries. In this case, diversification is muting the impact of the sector’s biggest winners.
Key Takeaway Trump’s executive orders and new federal funding commitments are giving quantum computing stocks a boost even as the broader technology sector weakens. The long-term opportunity remains speculative, but government support is becoming increasingly tangible.
For investors seeking exposure, IBM stands out because it combines quantum leadership with a profitable, established business generating tens of billions of dollars in annual revenue. IonQ remains an intriguing alternative for investors willing to accept more risk in exchange for potentially greater upside.
Ultimately, quantum computing is still in its early innings. In a sector where many companies are years away from consistent profitability, the biggest and most financially secure player may offer the most attractive risk-reward balance.
Quantum computing stocks gained renewed attention this week after President Donald Trump signed executive orders targeting a powerful U.S.-made quantum computer by 2028 and bolstering the infrastructure needed to advance the emerging technology.
Why IBM Stands OutThe White House’s latest push comes just weeks after the U.S. Commerce Department announced a $2 billion quantum initiative that includes investments and grants for several quantum-focused companies.
IBM emerged as the largest beneficiary, receiving roughly $1 billion to help launch Anderon, a new company expected to become America’s first dedicated quantum wafer foundry. IBM is also contributing approximately $1 billion of its own capital to the project. The foundry is expected to strengthen the domestic supply chain for quantum hardware—one of the same priorities highlighted in Trump’s executive orders.
In other words, Washington’s latest quantum strategy aligns closely with the infrastructure IBM is already helping build.
More Than A Quantum Research CompanyIBM’s advantage isn’t limited to government funding.
The company has spent years developing quantum hardware, software and cloud-based quantum services while building one of the industry’s largest quantum ecosystems. It has also outlined plans to develop a large-scale fault-tolerant quantum computer before the end of the decade, putting its roadmap broadly in line with the administration’s accelerated timeline.
Reports also indicated IBM CEO Arvind Krishna attended the Oval Office signing ceremony, highlighting the company’s growing role in the broader U.S. quantum effort.
That combination of government support, manufacturing infrastructure and existing technology development gives IBM a different profile than many of the pure-play quantum names attracting investor attention.
Why Investors Should Pay AttentionQuantum computing remains an emerging industry, and widespread commercial adoption is still years away.
But investors often look for signals that a technology is moving from research labs toward real-world deployment. Government support has historically played an important role in accelerating industries ranging from semiconductors to artificial intelligence.
The latest executive orders suggest quantum computing could be next.
For investors, the takeaway isn’t that IBM is the only potential winner from Washington’s quantum push. It’s that the company appears unusually well-positioned for a future that the government is actively trying to accelerate.
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Yesterday's tech selloff looks ready to spill over and accelerate into today, as the tech rout turns global. Futures tied to the Dow Jones Industrial Average (DJIA) are down over 200 points, while S&P 500 (SPX) futures are modestly lower too. The tech heavy Nasdaq-100 (NDX) index is bearing the brunt off the pitfall, off by over 800 points ahead of the open. Once-outperforming chip and memory stocks are getting crushed, with Micron (MU) and SanDisk (SNDK) each down 9% premarket.
Continue reading for more on today's market, including:
Monitor these overhead resistance levels, says Senior V.P. of Research Todd Salamone. "Buy" signal shines even amid CAT record run. Plus, more on the chip stock selloff; and IBM receives lift from analyst.
5 Things You Need to Know Today The Cboe Options Exchange saw roughly 2.8 million call contracts and 1.7 million put contracts traded on Monday. The single-session equity put/call ratio rose to 0.60, while the 21-day moving average fell to 0.58. Market cap leader Nvidia (NASDAQ:NVDA) is 3% lower before the open as part of the tech sector rout. Year-over-year, the stock sports a 45% lead heading into today. Intel (NASDAQ:INTC) is not exempt from the tech carnage today, already down 7.6% premarket and poised to snap its three-day win streak. Intel stock has enjoyed a profitable year though, having added 282% for 2026. International Business Machines Corp (NYSE:IBM) is up 2.7% ahead of the open after J.P. Morgan Securities issued an upgrade to "overweight" from "neutral," to go with a price-target hike to $291 from $270. Morgan Stanley chimed in with a price-target hike of its own to $267 from $225. IBM stock has shed 24% since tapping a record high of $332.41 earlier this month. This week will bring several key economic indicators.
Tech Turmoil Turns Global as Samsung, SK Hynix Cool Off Asian markets experienced a massive selloff on Tuesday as global tech stocks tumbled. Thanks to sharp gaps lower from Samsung Electronics and SK Hynix, the South Korean Kospi dropped 10%, triggering circuit breakers twice, while Japan’s Nikkei snapped an eight-day win streak with a 3.6% loss. Hong Kong’s Hang Seng and China’s Shanghai Composite shed 1.8% and 1.4%, respectively.
European markets are feeling the heat from tech weakness as well. London’s FTSE 100 is down 0.4%, after the U.K.’s manufacturing orders shrunk at the fastest rate since 2020, while the French CAC 40 was last seen down 0.7%, and the German DAX slides 0.9%.
Shares of IBM climbed nearly 5% in premarket trading on Tuesday after JPMorgan upgraded the technology company, citing increasing confidence in its software business and potential benefits from growing artificial intelligence adoption.
JPMorgan analyst Brian Essex upgraded IBM to Overweight from Neutral and raised his price target to $291 from $270.
The analyst said expectations for software acceleration in the second half of 2026 have strengthened the firm's outlook on the stock.
The upgrade comes as IBM continues a multiyear transformation from a hardware and services provider into a software-led platform focused on hybrid cloud and artificial intelligence technologies.
JPMorgan highlighted several growth drivers, including momentum from Red Hat and OpenShift migration activities.
The firm pointed to OpenShift's role in supporting the adoption of IBM's AI-driven container platform among enterprises.
The analysts also noted accelerating automation demand following IBM's acquisition of HashiCorp, which management said is receiving increasing support from senior corporate executives.
IBM's software segment has become the primary earnings engine for the company.
According to JPMorgan, software now accounts for roughly 45% of IBM's revenue but generates approximately two-thirds of consolidated profit.
"We view the continued shift toward software as positive considering the higher-margin, ratable nature of software with better cash conversion and a higher-quality earnings stream that supports a higher multiple than the hardware and services businesses," the analysts said.
JPMorgan also said that if IBM becomes a significant beneficiary of rising AI demand, the stock could see further valuation expansion.
Separately, Morgan Stanley raised its price target on IBM to $267 from $225 while maintaining an Equal Weight rating.
The firm noted that recent earnings reports from Dell and Hewlett Packard Enterprise demonstrated that enterprise server demand has remained stronger than expected despite higher prices driven by compute shortages, hardware refresh cycles and growing AI infrastructure requirements.
Morgan Stanley added that Wall Street expectations for 2026 and 2027 "look too low" and increased its earnings-per-share estimates by 5% to 6% for companies with exposure to computing demand.
IBM may also benefit from fresh support for quantum computing from the US government.
Chief Executive Officer Arvind Krishna attended the White House on Monday as President Donald Trump signed two executive orders designed to accelerate domestic quantum computing development and strengthen cybersecurity protections against quantum-powered threats.
The first executive order directs the development of "the first-ever quantum computer powerful enough for scientific research," with the goal of locating the system in a national laboratory by 2028.
The second order accelerates the federal government's transition to post-quantum cryptography by 2031.
"When President Trump published a letter to me in early 2025, he prioritized quantum as a key industry for America to lead the world alongside AI and nuclear energy," said Michael Kratsios, the president's top advisor on science and technology policy.
Industry participants are working toward achieving fault tolerance by the end of the decade, a milestone that would allow quantum computers to operate reliably even when individual components experience failures or disruptions.
The latest policy initiatives add another potential growth catalyst for IBM as it expands its presence in artificial intelligence, hybrid cloud software, and next-generation computing technologies.
Bucking the tech sector slide is IBM Corp (NYSE:IBM), up 5.1% to trade at $264.75 this morning, after landing an upgrade from J.P. Morgan Securities to "overweight" from "neutral." The firm also hiked its price target to $291 from $270, citing the company's OpenShift platform demand.
Quantum computing stocks are also up across the board, after President Donald Trump signed an order to build a quantum computer. IonQ (IONQ) and Infleqtion (INFQ) are up 3% and 14%, respectively.
IBM Friday gapped below the 100-day moving average $260 level, but has reclaimed both today. The shares now sport a 14% year-to-date deficit, but are still 21% off their June 2 record high of $332.46.
Options traders are extremely bullish. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Credo Technology stock's 50-day call/put volume ratio of 3.70 ranks in the highest possible annual percentile. This sentiment is echoed by the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.56, which ranks higher than just 1% of readings from the past year.
Call traders are circling right out of the gate, with 37,000 contracts trading in the first 30 minutes. This comes in at four times the average daily rate, with the July 300 call and weekly 6/26 260-strike call seeing the most action.
Even further, the stock sports a Schaeffer's Volatility Scorecard (SVS) of 93 out of 100. This suggests the equity has consistently realized higher-than-expected volatility over the past 12 months.
JPMorgan's upgrade for IBM Corp. (IBM) set the foundation for a rally Tuesday as the rest of the tech sector takes a beating from an AI memory sell-off in South Korea. Marley Kayden walks investors through the upgrade and outlines the bull case JPMorgan sees in Big Blue.
Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades, downgrades and initiations, please see our analyst ratings page.
Considering buying CHWY stock? Here’s what analysts think:
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HomeIndustriesComputers/ElectronicsTech StocksTech StocksIBM looks like a focal point as the U.S. further backs domestic quantum-computing initiativesLast Updated: June 23, 2026 at 5:11 p.m. ET
First Published: June 23, 2026 at 1:04 p.m. ET
Shares of IBM rose 5% on Tuesday after President Donald Trump signed executive orders on quantum computing. Photo: AFP/Getty ImagesPresident Donald Trump sold IBM’s stock before taking office, which was “not a good move,” he acknowledged on Monday.
Lately, Trump has become a fan of IBM IBM once more, praising not just the company but also CEO Arvind Krishna. Trump called Krishna a “great man” as he announced two executive orders Monday meant to help U.S. quantum-computing players enhance their capabilities. The IBM CEO was standing behind him at the Resolute Desk in the Oval Office for that moment.
Jessica Inskip (@jessicainskip) returns to the Big 3 and offers a glimpse into stocks she sees as beneficiaries in the AI trade. She points to GE Vernova (GEV) as a key player in the data center buildout with a higher margin compared to competitors.
Key Takeaways IBM shares gained Tuesday, bucking the trend as the broader tech sector came under pressure.The tech giant's stock got an upgrade from JPMorgan analysts Tuesday, and the Trump administration laid out new plans to support the quantum computing industry. Get personalized, AI-powered answers built on 27+ years of trusted expertise.
International Business Machines weathered Tuesday's tech pullback better than most, thanks to a fresh vote of confidence on Wall Street, and a boost from the federal government.
Shares of IBM (IBM) climbed over 5% to close just under $265, making it one of the best-performing stocks in the S&P 500 on a day when the index declined, after JPMorgan analysts upgraded the stock to "overweight" from neutral, and lifted their price target to $291 from $270.1 Five of the six analysts with current ratings tracked by Visible Alpha have issued "buy" or equivalent ratings for the stock, with a mean target of $322.
The JPMorgan analysts said they think investors could be underappreciating the potential of IBM's software business, and that they have greater confidence in the segment's growth over the second half of this year, thanks in part to signs of growing AI adoption. "AI is a direct tailwind for software," they wrote.
Why This Matters to Investors JPMorgan's upgrade and more federal support for the quantum computing industry could help boost confidence in IBM's stock, which has pulled back recently from its highs at the start of the month.
IBM could also stand to benefit from the U.S. government's moves to grow America's quantum computing industry. The Trump administration earlier today announced a pair of executive orders aimed at fast-tracking developments in quantum computing. Fellow quantum firm D-Wave Quantum (QBTS) also gained alongside IBM Tuesday, with shares adding 2%.23
The expanded federal support efforts also come just a month after the Trump administration announced plans to take stakes in a number of public and private quantum firms in exchange for CHIPS Act funding, with $1 billion set to go to IBM.
Even with Tuesday's gains, IBM shares are down about 11% from where they started the year, and have dropped about a fifth from their highs in early June.
This article has been updated since it was first published to reflect more recent prices.
International Business Machines weathered Tuesday's tech pullback better than most, thanks to a fresh vote of confidence on Wall Street, and a boost from the federal government.
New Federal Reserve Board Chairman Kevin Warsh presided over his first meeting of the Federal Open Market Committee (FOMC), and the headlines for the meeting were about how the Fed kept rates in check.
But often the more interesting stories lie in the press conference the Fed chair holds after the meeting. In the latest Q&A with the press on June 17, Warsh made an interesting observation about artificial intelligence (AI) that put into perspective the massive, far-reaching impact of the technology.
"Artificial intelligence, the latest generation of general purpose technology, is perhaps as important a change in the economy and business and households that we've had in my adult lifetime," Warsh said.
Within that statement lies the double-edged sword that is AI. The last disruptive technology, the internet, created so much buzz that the market got overheated and led to a two-year bear market. After three-plus years of a bull market driven by AI, valuations are near those dot-com era highs, so investors should be cautious about a potential reset or pullback with AI stocks.
Image source: Getty Images.
Dividend stocks are one of the best ways to fortify a portfolio against a market downturn, because the added income can be reinvested to boost returns. Also, dividend stocks typically come from sturdy, well-capitalized companies that tend to perform well in various market cycles.
As AI companies mature, more of them are offering hearty dividends, which can help boost their returns if there is a market downturn. Here are two dividend-paying AI stocks that are well positioned to navigate this changing landscape.
1. IBM International Business Machines (IBM 1.65%), or IBM, has embraced AI in its cloud computing and IT consulting business through its watsonX software, which helps organizations integrate AI into their systems.
IBM stock is down about 15% year to date, with most of the losses coming in June after the stock soared to near an all-time high of $329 per share on June 2. Since then, it has dropped 25% to $245 per share as part of a larger tech sell-off following a meteoric two-month surge for tech stocks.
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Now IBM is trading at just 22 times earnings, down from 50 a year ago. It is also trading at just 20 times forward earnings, making it a bargain right now.
Add to that a stellar and consistent dividend. IBM pays out a yield of 2.71%, which is far better than the average S&P 500 yield of 1.05%. Also, IBM has increased its dividend for 26 straight years, an incredible record of consistency.
To illustrate the impact of the reinvested dividend, IBM stock has averaged about a 12% return over the past five years. But with the dividend reinvested, the average annualized five-year return jumps to almost 17%.
2. Accenture Accenture (ACN 0.71%) is another consulting firm that helps companies and organizations integrate and deploy technology and AI throughout their systems and enterprises.
Accenture has one of the absolute best dividends, not just among AI stocks, but on the entire stock market right now. It pays out a yield of 5.1%, which is one of the highest yields you'll find. It has also been consistent, raising its dividend for 15 consecutive years.
The stock has crashed about 38% since late May, falling from about $196 per share to the current $122 per share. Part of it stems from the larger tech sell-off related to valuation concerns, but for Accenture, the sell-off was exacerbated by a weak earnings report that saw Accenture miss revenue estimates and cut its revenue outlook due in part to headwinds from U.S. government cost-cutting.
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Accenture stock is dirt cheap right now, trading at 10 times earnings and 8 times forward earnings.
Accenture has struggled to generate returns in recent years, with a five-year annualized total return of negative 13%, but it also hasn't been this cheap in more than 10 years. The rock-bottom valuation and reliable dividend make Accenture a stock that could outperform in the upcoming cycle.
Wall Street analysts have a median price target of $180 per share for Accenture stock, which would suggest 47% upside.
Unlike most AI stocks, these two are cheap and have great dividends -- a combination that could serve them well in the upcoming market cycle.
Collaboration combines vulnerability discovery, virtual patching and software remediation to help organizations reduce the time between vulnerability discovery and protection.
SANTA CLARA, Calif., ARMONK, N.Y. & RALEIGH, N.C.--(BUSINESS WIRE)--Palo Alto Networks (NASDAQ: PANW), IBM (NYSE: IBM) and Red Hat today announced a collaboration to help organizations identify vulnerabilities early and deploy protections fast across open source software, commercial applications, operational technology (OT) and healthcare technologies. By integrating Palo Alto Networks Virtual Patching capability with Project Lightwell from IBM and Red Hat, the collaboration combines rapid network-level protection with software remediation to help organizations reduce exposure to emerging threats.
The collaboration connects IBM and Red Hat’s $5 billion commitment to open source security via Project Lightwell with Palo Alto Networks’ security platform.
Share AI has supercharged vulnerability discovery, enabling flaws to be identified at unprecedented speed and scale. AI-driven threats can uncover security gaps across codebases far faster than defenders can patch them, exposing organizations to systemic supply-chain risks.
Nikesh Arora, CEO and Chairman of Palo Alto Networks
"AI has compressed the window between vulnerability discovery and exploit from weeks to minutes. Traditional patching cannot keep pace. By collaborating with IBM and Red Hat, we are shifting the advantage back to defenders. This powerful combination allows us to neutralize threats in the network while providing uninterrupted business continuity for our global clients."
Arvind Krishna, Chairman and CEO of IBM
"IBM established Project Lightwell to secure the open-source software foundation that enterprises rely on every day. By collaborating with Palo Alto Networks, we are extending that security from the source code directly to the network front lines. This joint solution gives our clients exactly what they need to thrive in the AI era: immediate, automated resilience against emerging threats, combined with the rigorous validation required to safely update their core systems."
A Seamless "Shield-and-Fix" Workflow
The collaboration connects IBM and Red Hat’s $5 billion commitment to open source security via Project Lightwell with Palo Alto Networks’ security platform. This creates a dual-action defense: Palo Alto Networks rapidly deploys a virtual patch at the network layer to block exploit attempts, while IBM and Red Hat’s Project Lightwell offers software remediation for open source software that customers can test and deploy in their environments.
The collaboration combines vulnerability intelligence, software remediation and network-based protections to help organizations respond quickly to newly discovered vulnerabilities. Key capabilities include:
Broader Vulnerability Coverage: Protection across open source software, commercial applications, operational technology (OT) environments and connected devices. Preemptive Coverage: Organizations can receive virtual patch protections before official software patches become available, helping reduce exposure while remediation is underway. Rapid Protection: When a new vulnerability is discovered, network-level protections can be deployed the same day, with a long-term goal of reducing the time from validated discovery to protection. The companies also plan to establish secure processes for sharing vulnerability information across participating software vendors, technology providers and security teams. This collaboration is expected to support coordinated vulnerability disclosure, accelerate protection development and provide anonymized telemetry on real-world exploitation attempts.
Expert Deployment via IBM Consulting
To help organizations respond more effectively to newly discovered vulnerabilities, IBM Security Services can also provide advisory and deployment services that help customers identify which vulnerabilities pose the greatest risk to their business and determine the best path to remediation. Working alongside Palo Alto Networks' virtual patching capabilities and Project Lightwell's software remediation capabilities, IBM Security Services can help customers prioritize, deploy and validate protections and fixes across complex environments.
About Palo Alto Networks
Palo Alto Networks (NASDAQ: PANW), the global AI cybersecurity leader, protects our digital way of life with a comprehensive portfolio of cybersecurity solutions and platforms across Network, Cloud, Security Operations, AI and Identity. Trusted by 70,000+ customers and powered by Unit 42 threat intelligence, our AI-driven platforms eliminate complexity, empowering enterprises to modernize with confidence and securing the speed of innovation. Explore the future of security at www.paloaltonetworks.com.
Palo Alto Networks, Prisma, Prisma AIRS, Idira and the Palo Alto Networks logo are trademarks of Palo Alto Networks, Inc. in the United States and in jurisdictions throughout the world. All other trademarks, trade names, or service marks used or mentioned herein belong to their respective owners. Any unreleased services or features (and any services or features not generally available to customers) referenced in this or other press releases or public statements are not currently available (or are not yet generally available to customers) and may not be delivered when expected or at all. Customers who purchase Palo Alto Networks applications should make their purchase decisions based on services and features currently generally available.
About IBM
IBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Thousands of governments and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM's hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM's breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM's long-standing commitment to trust, transparency, responsibility, inclusivity and service.
Visit www.ibm.com for more information.
About Red Hat
Red Hat is the open hybrid cloud technology leader, delivering a trusted, consistent and comprehensive foundation for transformative IT innovation and AI applications. Its portfolio of cloud, developer, AI, Linux, automation and application platform technologies enables any application, anywhere—from the datacenter to the edge. As the world's leading provider of enterprise open source software solutions, Red Hat invests in open ecosystems and communities to solve tomorrow's IT challenges. Collaborating with partners and customers, Red Hat helps them build, connect, automate, secure and manage their IT environments, supported by consulting services and award-winning training and certification offerings.
Forward-Looking Statements
This release contains forward-looking statements with respect to Palo Alto Networks that involve risks, uncertainties and assumptions, including, without limitation, statements regarding the benefits, impact, or performance or potential benefits, impact or performance of Palo Alto Networks products, technologies, and integrations or future products, technologies, and integrations. These forward-looking statements are not guarantees of future performance, and there are a significant number of factors that could cause actual results to differ materially from statements made in this release. Palo Alto Networks identifies certain important risks and uncertainties that could affect its results and performance in its most recent Annual Report on Form 10-K, its most recent Quarterly Report on Form 10-Q, and its other filings with the Securities and Exchange Commission from time-to-time, each of which are available on Palo Alto Networks' website at investors.paloaltonetworks.com and on the SEC's website at www.sec.gov. All forward-looking statements in this release regarding Palo Alto Networks are based on information available to Palo Alto Networks as of the date hereof, and Palo Alto Networks does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
UnitedHealth Group (UNH - Free Report) closed at $399.53 in the latest trading session, marking a -1.99% move from the prior day. The stock's performance was behind the S&P 500's daily loss of 1.22%. At the same time, the Dow lost 0.98%, and the tech-heavy Nasdaq lost 1.35%.
The stock of largest U.S. health insurer has risen by 4.73% in the past month, leading the Medical sector's gain of 4.11% and the S&P 500's gain of 1.56%.
Analysts and investors alike will be keeping a close eye on the performance of UnitedHealth Group in its upcoming earnings disclosure. The company's earnings report is set to go public on July 16, 2026. The company's upcoming EPS is projected at $4.84, signifying a 18.63% increase compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $110.05 billion, indicating a 1.4% decline compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $18.32 per share and revenue of $443.7 billion, which would represent changes of +12.05% and -0.86%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for UnitedHealth Group. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.15% higher. UnitedHealth Group presently features a Zacks Rank of #3 (Hold).
From a valuation perspective, UnitedHealth Group is currently exchanging hands at a Forward P/E ratio of 22.26. This indicates a premium in contrast to its industry's Forward P/E of 18.12.
Investors should also note that UNH has a PEG ratio of 1.64 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Medical - HMOs industry held an average PEG ratio of 1.13.
The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 25, putting it in the top 11% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
UnitedHealth Group (UNH - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this largest U.S. health insurer have returned +4.8% over the past month versus the Zacks S&P 500 composite's +1.4% change. The Zacks Medical - HMOs industry, to which UnitedHealth belongs, has gained 3.1% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
UnitedHealth is expected to post earnings of $4.84 per share for the current quarter, representing a year-over-year change of +18.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
For the current fiscal year, the consensus earnings estimate of $18.32 points to a change of +12.1% from the prior year. Over the last 30 days, this estimate has changed +0.2%.
For the next fiscal year, the consensus earnings estimate of $20.8 indicates a change of +13.6% from what UnitedHealth is expected to report a year ago. Over the past month, the estimate has changed +0.3%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, UnitedHealth is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For UnitedHealth, the consensus sales estimate for the current quarter of $110.05 billion indicates a year-over-year change of -1.4%. For the current and next fiscal years, $443.7 billion and $454.87 billion estimates indicate -0.9% and +2.5% changes, respectively.
Last Reported Results and Surprise HistoryUnitedHealth reported revenues of $111.72 billion in the last reported quarter, representing a year-over-year change of +2%. EPS of $7.23 for the same period compares with $7.2 a year ago.
Compared to the Zacks Consensus Estimate of $109.45 billion, the reported revenues represent a surprise of +2.07%. The EPS surprise was +11.92%.
Over the last four quarters, UnitedHealth surpassed consensus EPS estimates three times. The company topped consensus revenue estimates two times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
UnitedHealth is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about UnitedHealth. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
UnitedHealth says AI is driving 2-to-1 returns and could cut operating costs by almost $1 billion this year. Summary
AI is becoming central to UnitedHealth’s cost-cutting and efficiency push.
UnitedHealth Group UNH is putting artificial intelligence at the center of its turnaround strategy as the company looks to recover from last year's profit collapse. The largest US health insurer plans to invest $3 billion in AI across 2026 and 2027, with executives saying the technology is already generating a 2-to-1 return by automating manual work, improving efficiency, and potentially reducing friction for patients.
The company is using AI across a wide range of administrative tasks, from reading medical chart summaries to nurses on the road, to analyzing millions of customer calls, to testing AI agents that call doctors' offices to schedule appointments. UnitedHealth also expects AI to help reduce operating costs by almost $1 billion this year, while Optum Real, a coverage-checking system for medical providers, has processed about a billion transactions since launching last year.
Wall Street appears focused on the potential cost savings, with Morgan Stanley analysts noting that insurers and medical providers spend $80 billion a year on administrative transactions. Still, UnitedHealth may need to convince a skeptical public that AI will benefit patients, not just the bottom line, as the company faces lawsuits over insurer algorithms and scrutiny after a federal inspector general report linked a naviHealth algorithm to higher denial rates that were almost always overturned on appeal.
Warren Buffett’s Berkshire Hathaway (NYSE:BRK.B | BRK.B Price Prediction) fully exited its UnitedHealth Group (NYSE:UNH) position in Q1 2026, and David Tepper’s Appaloosa Management meaningfully reduced its UNH stake in the same quarter. Chase Coleman also sold UnitedHealth shares in Q1. Meanwhile, the sell-side stayed bullish, with a consensus target of $407.38 and 22 buy or strong buy ratings against a single sell.
Two of the most scrutinized capital allocators in the business walked out the same door, in the same quarter. That is worth thinking about.
What Berkshire and Tepper walked away from UNH is not a broken business. Q1 2026 produced adjusted EPS of $7.23 against a $6.61 consensus, revenue of $111.72 billion, and a medical care ratio that improved 90 basis points to 83.9%. Management raised full-year adjusted EPS guidance to greater than $18.25. The stock is up 22.66% year to date through June 17 and 32.82% over the trailing year.
The path to get there involved shrinking. UnitedHealthcare lost 965,000 Medicare Advantage members in Q1 2026 alone, and the 2026 plan calls for a 2.3 to 2.8 million membership contraction from exits of unprofitable contracts. Margin recovery achieved by shedding members is real. It is also structurally different from margin recovery driven by pricing power.
The thesis behind the exits Three forward-looking pressures appear to be sitting on the trade. First, preliminary 2027 Medicare Advantage rate announcements came in below expectations, the same catalyst SGA Global Growth Fund cited on June 17, 2026 when it sold its entire UNH stake. Second, a federal OIG report on June 12, 2026 documented post-hospital care denial rates of 51 to 80% at UnitedHealth’s Medicare Advantage plans, well above peers. Fairview Health Services said the same week it will stop accepting UnitedHealthcare Medicare Advantage in 2027, affecting more than 11,000 patients.
Third, Optum Health’s profitability is rebuilding slower than the Street modeled. Q1 2026 Optum operating earnings of $3.3 billion still trail the prior-year $3.89 billion, even after Q3 2025’s collapse to $255 million from $2.2 billion. Forward P/E sits at 22x, expensive against quarterly earnings growth of 0.7% and revenue growth of 2%.
What this signals for a retirement portfolio Institutional exits do not automatically equal a verdict. Berkshire trims names for tax, concentration, and opportunity-cost reasons that have nothing to do with a company being doomed. Tepper rotates aggressively and frequently. Both have been wrong on individual names. UNH’s 0.65 beta and 2.15% dividend yield still make it a defensive holding by construction.
The useful question is whether the bull case rests on assumptions Berkshire and Tepper rejected. Analyst price targets are anchored to Q1 2026’s margin reset and a clean ramp into 2027. If preliminary 2027 Medicare Advantage rates land where they hint, and if denial-rate scrutiny translates into either rate pressure or forced approvals, both feed straight back into the medical care ratio. That single variable took UNH down to a 52-week low of $228.48.
For a retirement-focused investor, the takeaway is narrower than copying the billionaires. The bullish thesis depends on a 2027 rate environment that two sophisticated holders apparently no longer want to underwrite. Worth weighing before deciding whether the year-to-date rally is the recovery itself or the exit ramp.
Key Takeaways UNH benefits from insurance, care delivery, pharmacy and technology businesses under one platform.UNH is expanding AI initiatives and value-based care efforts to improve efficiency and growth.Humana's Medicare membership and CenterWell revenues rose strongly, but EPS estimates remain pressured. UnitedHealth Group Incorporated (UNH - Free Report) and Humana Inc. (HUM - Free Report) are leading U.S. managed-care and health insurance companies operating in an industry that is navigating higher medical-cost trends, evolving reimbursement policies and changing regulatory requirements. Both companies have significant exposure to the Medicare Advantage market, making them key participants in one of the fastest-growing segments of the healthcare insurance landscape.
While UNH and HUM compete within the same sector and face many of the same industry dynamics, their business models and strategic priorities differ. UnitedHealth benefits from a diversified healthcare platform that spans insurance, health services and care delivery, whereas Humana maintains a greater focus on government-sponsored healthcare programs, particularly Medicare-related offerings. These distinctions influence their growth profiles, profitability trends and overall market positioning.
Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one is a better bet now.
The Case for UNHUnitedHealth's growth is supported by the breadth of its healthcare ecosystem, which combines insurance, pharmacy services, care delivery and healthcare technology under one platform. The company generated total revenues of $111.7 billion, which grew 2% year over year in the first quarter of 2026, benefiting from pricing actions, a favorable member mix and improving operational execution across its businesses.
UnitedHealthcare unit remains a key earnings driver for the company, supported by its leading positions in Medicare Advantage, commercial insurance and government-sponsored programs. Recent pricing actions have improved alignment between premiums and healthcare costs, while a greater focus on affordability initiatives and cost management is helping stabilize margins. The business is also expanding digital engagement, with nearly half of its members now using its digital platform and digital interactions becoming the primary channel for customer service. In the first quarter of 2026, the unit’s revenues rose 1.9% year over year.
Another major contributor to future growth is Optum Health, where the company continues to strengthen its value-based care models. The segment served around 93 million people in first-quarter 2026. Greater care coordination, improved patient navigation and enhanced clinical oversight are helping reduce unnecessary hospital and post-acute care utilization, supporting better health outcomes while improving operating performance.
Technology is becoming another key pillar of UnitedHealth's strategy. The company plans to invest nearly $1.5 billion in AI-related initiatives in 2026 to streamline administrative processes, improve customer experiences and increase productivity across its operations. Meanwhile, Optum Insight is expanding AI-driven solutions for healthcare providers and payers, creating an additional avenue for growth beyond traditional insurance operations.
Alongside these efforts, investments in provider connectivity, automation and streamlined authorization processes are helping improve member experiences, drive operational efficiencies and strengthen the long-term competitiveness of the insurance segment. The company benefits from significant scale and diversification, although persistent medical-cost inflation and regulatory changes could weigh on earnings growth in the near term. UNH beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 0.8%.
Financially, UNH is in a solid position. It ended the first quarter of 2026 with $31.2 billion in cash and short-term investments, sufficient to cover its short-term borrowings and current maturities of long-term debt, which stands at $6.5 billion. Its total debt-to-capital of 40.75% is below HUM’s 42.9% and the industry’s 42.9%. In the first quarter of 2026, it paid dividends worth $2 billion.
The Case for HUMHumana's growth is being driven by continued expansion in its Medicare-focused businesses and the increasing scale of CenterWell, its healthcare services platform. In the first quarter of 2026, total revenues rose 23.5% year over year, supported by strong growth in Medicare Advantage and Medicare Part D membership. Total Medicare membership increased to nearly 11 million members, while Medicare Advantage membership climbed 23% year over year to 7.1 million in the quarter.
CenterWell remains a key strategic growth engine for Humana as the company continues to deepen its presence across primary care, home health and pharmacy services. The segment generated $6.1 billion in revenues in the first quarter of 2026, up nearly 20% from the prior-year period. By strengthening the integration between healthcare services and insurance operations, CenterWell supports member engagement, care coordination and long-term growth opportunities beyond the company's core insurance business.
The company is emphasizing disciplined pricing, benefit optimization and cost-management initiatives to improve Medicare Advantage margins following a period of elevated healthcare utilization. This approach is designed to strengthen earnings quality and support a more sustainable long-term growth profile while maintaining competitiveness in its core markets. It beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 3.8%.
HUM is also investing in data interoperability, digital capabilities and quality-improvement initiatives that support its integrated care model. These efforts are intended to enhance healthcare outcomes, improve operational efficiency and strengthen Star Ratings performance over time, which remains a key driver of reimbursement levels, member retention and long-term profitability. However, competitive pressures and ongoing cost trends remain key factors that could influence earnings and margin recovery in the years ahead.
Nevertheless, as of March 31, 2026, the company had cash and cash equivalents of $5 billion, with short-term debt of $1.7 billion only, which implies a solid capital position. Humana has been returning excess capital to its shareholders in the past several years. It repurchased common shares in connection with employee stock plans for $107 million in the first quarter of 2026. The company also paid dividends of $107 million during the quarter. However, its dividend yield of 1% is below UNH’s 2.3%.
Price Performance ComparisonIn the year-to-date period, HUM shares have outperformed UNH, the industry and the S&P 500.
Price Performance – UNH, HUM, Industry & S&P 500
Image Source: Zacks Investment Research
How Do Estimates Compare for UNH & HUM?The Zacks Consensus Estimate favors UNH at this stage. The consensus estimate for UNH’s 2026 earnings indicates a 12.1% increase from a year ago. Over the past 60 days, the estimate has witnessed 14 upward revisions with no downward adjustments. Meanwhile, the consensus estimate for revenues suggests a 0.9% decline.
On the other hand, the Zacks Consensus Estimate for HUM’s 2026 revenues indicates 25.3% year-over-year growth, but the same for EPS signals a massive 47.4% decline. Over the past 60 days, the estimate has seen three upward revisions with two downward adjustments.
Valuation: UNH vs. HUMFrom a valuation standpoint, UnitedHealth may appear slightly more expensive than the industry at first glance, but it represents its size, operational consistency and business diversification. Humana’s stock currently trades at a higher multiple than UNH. UnitedHealth is currently priced at 20.57X forward 12-month earnings, compared to Humana’s 30.47X, both above the industry average of 17.46X.
Image Source: Zacks Investment Research
UNH currently trades below its average analyst price target of $412.56, implying a 2.9% potential upside from current levels. Meanwhile, HUM trades above its average analyst price target of $300.26, implying a 16.7% potential downside from current levels.
ConclusionBoth UnitedHealth and Humana are leading managed-care companies with strong positions in the Medicare Advantage market. Humana is benefiting from robust membership growth and the expansion of CenterWell, but its earnings recovery remains dependent on improving Medicare Advantage margins and reimbursement dynamics.
UnitedHealth, however, appears to have the edge due to its diversified business model, stronger financial position and broader growth opportunities across insurance, healthcare services and technology. Despite ongoing regulatory and cost-related pressures, its superior earnings growth outlook, attractive valuation and higher dividend yield make UNH the stronger healthcare stock at present, even though both companies currently carry a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Let's take a look at what these Wall Street heavyweights have to say about UnitedHealth Group (UNH - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
UnitedHealth currently has an average brokerage recommendation (ABR) of 1.54, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 27 brokerage firms. An ABR of 1.54 approximates between Strong Buy and Buy.
Of the 27 recommendations that derive the current ABR, 19 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 70.4% and 11.1% of all recommendations.
Brokerage Recommendation Trends for UNH
Check price target & stock forecast for UnitedHealth here>>>
While the ABR calls for buying UnitedHealth, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is UNH Worth Investing In?In terms of earnings estimate revisions for UnitedHealth, the Zacks Consensus Estimate for the current year has increased 0.2% over the past month to $18.32.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for UnitedHealth. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for UnitedHealth may serve as a useful guide for investors.
Pharmacy Retailer Supports Holiday Health Needs as Emergency Room and Urgent Care Visits Spike During July 4 Celebrations
DEERFIELD, Ill.--(BUSINESS WIRE)--This Independence Day, Walgreens will serve as a reliable destination for both last-minute essentials and essential pharmacy services, as summer celebrations drive one of the busiest days of the year for emergency and urgent care visits.
Walgreens stores will operate under their regular business hours on July 4. Unlike previous years - when stores remained open but most pharmacies were closed - Walgreens will keep more than 4,000 pharmacy locations open. This expanded availability enhances timely access to prescriptions, over-the-counter treatments, and on-site pharmacist support when patients need it most.
The Fourth of July is consistently one of the busiest days of the year for emergency rooms, with tens of thousands of injury-related visits driven by fireworks, grilling, travel, and outdoor activities. Many patients require immediate prescriptions or medication support following care - making pharmacy access a critical extension of treatment during the holiday.
In addition to expanded pharmacy access, customers can continue to take advantage of special promotions, 1-hour Delivery*, 30-minute Pickup*, and convenient in-store shopping throughout the holiday for last-minute needs.
Store and pharmacy hours may vary by location. Customers are encouraged to check the store locator for the most up-to-date store and pharmacy hours.
Military Appreciation Offer: In honor of Independence Day, Walgreens will offer a 20% in‑store discount to veterans, active‑duty service members, and their immediate families, including families of fallen heroes from Friday, July 3, to Sunday, July 5.**
The discount is available to customers enrolled in myWalgreens® who present a valid military ID or proof of service at checkout. Enrollment in myWalgreens® is free and can be activated at checkout.
Available at all Walgreens and Duane Reade stores nationwide. Offer valid in-store only.
About Walgreens
Founded in 1901, Walgreens (www.walgreens.com) proudly serves more than 9 million customers and patients each day across its nearly 8,000 stores throughout the U.S. and Puerto Rico. Walgreens has approximately 211,000 team members, including roughly 85,000 healthcare service providers, and is committed to being the first choice for pharmacy, retail and health services, building trusted relationships that create healthier futures for customers, patients, team members and communities.
*Delivery in as little as 1 hour and Pickup in as little as 30 minutes based on national averages, actual times may vary. Pickup is available for eligible items when your order is $10 or more (after promo codes and paperless coupons are applied and before taxes). Exclusions, restrictions, and fees may apply. For details, visit walgreens.com/store-services/same-day-delivery and walgreens.com/store-services/store-pickup.
**Standard exclusions and restrictions apply: Offer valid for veterans, active-duty military and their immediate families from July 3 through July 5, with myWalgreens® and proof of service. Offer valid in-store only at any Walgreens or Duane Reade stores nationwide. Discount not valid on alcohol, dairy, tobacco, stamps, gift cards, newspapers, magazines, money orders/transfers, transportation passes, lottery tickets, charitable donations, pseudoephedrine or ephedrine products, clinic services, prescriptions, pharmacy items or services, sales tax and items or services submitted to insurance for reimbursement or where otherwise limited by law. Offer is not combinable with buy 1 get 1 free, buy 1 get 1 50% off or buy 2 get 3rd FREE. Offer does not apply to bulk orders, back-ordered items and out-of-stock items.
Efficacy and safety are top preferences when selecting antipruritic treatments, but dog owners and veterinarians want options that are easier to administer, more affordable and improve compliance
RAHWAY, N.J.--(BUSINESS WIRE)--Merck Animal Health, known as MSD Animal Health outside of the United States and Canada, a division of Merck & Co., Inc., Rahway, N.J., USA (NYSE:MRK), today announced results from a new global survey of dog owners and veterinarians revealing challenges and pain points associated with diagnosing the underlying cause of allergic skin disease in dogs and its treatment. According to Pet Owner and Vet Perspectives on Canine Pruritus: A Global Survey, about one-third of canine patients seen by U.S. veterinarians have itchy skin or allergic skin disease (27% of global canine patients) and about two in five dogs with skin conditions are newly diagnosed (U.S. and global).
Both dog owners and veterinarians feel fatigued and burdened by canine allergic skin disease, with 34% of U.S. dog owners reporting a notable negative impact on their own quality of life (31% globally). Additionally, 43% of dog owners who have dogs with itchy skin in the U.S. (39% globally) indicated a significant negative impact on the dog's quality of life. In fact, 86% of U.S. dog owners (90% globally) who have taken their dog with scratchy/itchy skin to the vet have discussed their dog’s itch with their vet with 61% of those dog owners specifically making the appointments with their veterinarian to discuss their pet’s itchy skin (60% globally). The survey also revealed that both dog owners and veterinarians have difficulty finding an effective treatment, with 28% of U.S. dog owners and 36% of U.S. veterinarians having switched therapies used to treat allergic skin disease in the last year (compared to globally 29% and 41%, respectively).
To access vet and pet owner resources, click here.
“Allergic skin disease is one of the most common clinical signs among dogs of all ages. Knowing that many dog owners and veterinarians are managing dogs with allergic skin disease, we wanted to understand the challenges they are facing when it comes to diagnosis, treatment, and compliance,” said Linda Horspool, BVMS, PhD, DipECVPT, FRCVS, Director Scientific Marketing Affairs, Global Marketing Companion Animals, Merck Animal Health. “We found that while veterinarians and owners both experience frustrations when communicating with one another about diagnosing the underlying cause of allergic skin disease and treatment plans, both parties have the same goal of finding a solution that is effective, safe and starts working fast.”
The insights from 1,710 dog owners and 1,413 veterinarians across 11 countries (8 countries for dog owners) revealed notable differences in their preferences, priorities and motivations for treating allergic skin disease in dogs. The findings underscore that dog owners and veterinarians both prioritize improving the quality of life of patients, but there are gaps in communication about the underlying cause of allergic skin disease, what to expect, the treatment selected, and how compliance impacts efficacy.
Key Findings
When selecting antipruritic therapies for their dogs, the top three features U.S. owners look for are efficacy, safety and specifically targeting itch.
When asked to select the features they felt are most important in a treatment for their itchy dog, owners in the U.S. and globally ranked effectiveness for itch as most important, safety profile as second most important and targeted for itch as third most important in the highest tier of importance. Globally and in the U.S. veterinarians ranked effectiveness and rapid onset as the most important features.
Despite listing safety and efficacy as a feature of most importance, antihistamines and corticosteroids use remains high
In dogs, antihistamines can cause drowsiness or hyperactivity, long-term or high-dose corticosteroids can lead to serious issues like immune suppression, vomiting, diarrhea, and Cushing's disease. Yet, 41% of U.S. dog owners report having used antihistamines to treat canine allergic skin disease in the last year (27% globally), while 23% report using corticosteroids (19% globally). Fifteen percent report using JAK inhibitors (11% globally), and 8% report using monoclonal antibodies (11% globally), which typically have fewer safety concerns and side effects.i
Veterinarians and dog owners in the U.S. stopped using antipruritic treatment for the same top reasons – lack of efficacy and safety concerns.
For U.S. dog owners, the top reasons they discontinued use of antipruritic treatment were because the product was not as effective as they’d like it to be (32%), the product was too costly/expensive (28%), they had safety concerns (21%), and one dose did not last long enough (21%). For U.S. veterinarians, 44% cited poor efficacy, 38% cited less targeted treatment, and 28% cited poor safety profile. While U.S. dog owners and veterinarians were aligned, global dog owners differed with top reasons being poor efficacy (22%), slow to start (20%), and my dog did not enjoy receiving it (18%). Globally, veterinarians also most frequently cited poor efficacy (46%), less targeted treatment (31%), and poor safety profile (27%).
Both veterinarians and dog owners were motivated to start using a treatment that was easier to administer and improved compliance.
U.S. dog owners who started a new treatment cited top factors for starting the treatment as recommended by veterinary staff (40%), safer for my dog (38%), and easier to administer or apply to my dog (35%). Reasons why U.S. veterinarians started recommending a treatment were: better efficacy (46%), innovative treatment that adds to the toolbox (44%), better client compliance (28%), more targeted treatment (26%) and price (26%). Globally, dog owners cited recommended by my vet (32%), easier to administer or apply to my dog (32%), and safer for my dog (31%). Globally, veterinarians cited better efficacy (48%), innovative treatment that adds to the toolbox (36%), more targeted treatment (32%),faster onset of action (27%) and better client compliance (26%).
Some available treatments come with a cost burden. When asked about unmet needs in current antipruritic treatments, the majority of veterinarians said there was a gap in cost effective, more affordable options.
52% of U.S. veterinarians and 46% of veterinarians globally said the top unmet need for canine antipruritic treatment is more cost-effective options. Additionally, about 1 in 10 veterinarians globally (6% of U.S. veterinarians) said medication for dogs 6 months of age or older was an unmet need. 13% of dogs with allergic skin conditions seen by veterinarians worldwide were 6–11 months old (9% in the US) and therefore too young to receive a JAK inhibitor that is approved for dogs 12 months and older.
Additional global qualitative findings suggest that both dog owners and veterinarians desire better communication and understanding of treatment plans and disease progression/ what to expect.
Interviews with 60 veterinarians and 25 dog owners from across five countries including the U.S. revealed key themes around the allergic skin disease journey. The chronic nature and variability of the condition make it difficult to manage from patient to patient, leading to veterinarian fatigue. Veterinarians also reported that pet owners have a misunderstanding of the chronic nature of allergic skin disease and how treatments work, causing compliance to suffer. Meanwhile, pet owners shared that they try to create a routine, but some are forced to spread out doses to counteract costs. Many owners also reported not receiving enough information or instruction from their veterinarian. Study Methodology
This quantitative study collected data through an online survey administered by a professional market research organization, adhering to global market research guidelines and codes of conduct. The study captured data from a representative sample of 1,413 companion animal veterinarians across 11 countries: the US, Canada, Australia, Japan, Brazil, Mexico, UK, France, Germany, Spain, and Poland. Data was also captured among a representative sample of 1,710 dog owners across 8 countries: the US, Canada, Australia, Mexico, UK, France, Germany, and Spain.
Qualifying dog owner participants were 18+ years of age, owned 1–4 dogs and were primary or shared decision makers regarding their dog’s healthcare. They had to own a dog that has exhibited or been treated for signs of atopic/allergic dermatitis in the past 12 months (includes both diagnosed and undiagnosed dogs). To reduce bias, participants affiliated with animal health companies or market research firms were excluded. The study targeted a representative sample of owner demographics, including geography, gender, age and household income. The survey took approximately 24 minutes to complete and was conducted from 20 February to 16 April 2025. Qualified respondents were asked about their dog’s condition, diagnosis, and impact of the disease, followed by a series of questions assessing treatment use, frequency of treatment, and perception of treatments. They were also asked to provide their thoughts on factors driving them to select a treatment, and factors that identify an ideal treatment, also to provide their opinions on a potential new product concept for allergic skin conditions. If a respondent had multiple dogs, they were asked to focus on the dog that has exhibited or been treated for signs of atopic/allergic dermatitis in the past 12 months.
Qualifying veterinarian participants were full-time veterinarians who personally see itchy/pruritic dogs including atopic dermatitis cases, had been practicing veterinary medicine for 2–40 years, were primary/co-decision makers regarding products recommended or prescribed at their practices.
The study targeted a representative mix of participant demographics, such as gender and age, and practice demographics, such as location, size and ownership type (corporate versus independent). Participants were excluded if they were competitively employed or serving in an advisory capacity to animal health, market research and/or pharmaceutical companies. The survey was fielded from 4 November 2024 to 13 January 2025 and took approximately 38 minutes to complete. Qualified participants answered questions assessing their canine patient load with the disease, their approach to treatment of allergic skin conditions, their perceptions of treatments, and the key factors that drive their selection of treatments. They were also asked to provide their opinions on a potential new product concept for allergic skin conditions.
Responses were collected and reviewed in an anonymized format. Open, free-text responses were grouped according to subject. Analysis consisted of descriptive analytics.
About Merck Animal Health
Merck Animal Health, a division of Merck & Co., Inc., Rahway, N.J., USA, is a global animal health business committed to The Science of Healthier Animals™. For more than 130 years, we have pioneered groundbreaking science. Today, we are driven by continuous innovation to develop breakthrough medicines, vaccines and technology. Rooted in direct experience on the farm and in the clinic, we work hand in hand with our customers every step of the way. Our singular focus is to empower those who care for animals, helping them manage their vital responsibility with confidence. Because when it comes to animal health, no one sees it like we do. For more information, visit www.merck-animal-health.com and connect with us on LinkedIn, Facebook, X (formerly Twitter) and Instagram.
Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA
This news release of Merck & Co., Inc., Rahway, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.
Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.
The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2025 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).
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i Sousa CA. Glucocorticoids in veterinary dermatology. In: Bonagura JD, Twedt DC, eds. Kirk's Current Veterinary Therapy. 14th ed. St Louis, MO: Saunders Elsevier; 2009:400-404.
RAHWAY, N.J.--(BUSINESS WIRE)--Merck (NYSE: MRK), known as MSD outside of the United States and Canada, today announced that the U.S. Food and Drug Administration (FDA) has approved an expanded indication for CAPVAXIVE® (Pneumococcal 21-valent Conjugate Vaccine) to include children and adolescents aged 2 through 17 years who have completed a primary pediatric pneumococcal vaccination series and have one or more chronic medical conditions that put them at an increased risk for pneumococcal disease. With this approval, CAPVAXIVE is the only PCV specifically indicated and studied in the U.S. for use in this patient population.
CAPVAXIVE is indicated for:
Active immunization for the prevention of invasive pneumococcal disease caused by Streptococcus pneumoniae serotypes 3, 6A, 7F, 8, 9N, 10A, 11A, 12F, 15A, 15B, 15C, 16F, 17F, 19A, 20A, 22F, 23A, 23B, 24F, 31, 33F and 35B in individuals 18 years of age and older and individuals 2 through 17 years of age who are at increased risk for pneumococcal disease; Active immunization for the prevention of pneumonia caused by S. pneumoniae serotypes 3, 6A, 7F, 8, 9N, 10A, 11A, 12F, 15A, 15C, 16F, 17F, 19A, 20A, 22F, 23A, 23B, 24F, 31, 33F and 35B in individuals 18 years of age and older. CAPVAXIVE should not be administered to individuals with a history of a severe allergic reaction (e.g., anaphylaxis) to any component of CAPVAXIVE or to diphtheria toxoid; see additional Select Safety Information below.
The indication for the prevention of pneumonia caused by S. pneumoniae serotypes 3, 6A, 7F, 8, 9N, 10A, 11A, 12F, 15A, 15C, 16F, 17F, 19A, 20A, 22F, 23A, 23B, 24F, 31, 33F, and 35B is approved under accelerated approval based on immune responses as measured by opsonophagocytic activity (OPA). Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial.
“Children and adolescents with certain chronic conditions are at an increased risk for pneumococcal disease, including pneumonia, meningitis, and bloodstream infections,” said Dr. Rotem Lapidot, Chief of Pediatric Infectious Diseases at Rambam Health Care Campus, investigator, STRIDE-13 trial. “This approval recognizes the potential of CAPVAXIVE to deliver additional protection by including serotypes not contained in approved primary pediatric PCV series, and represents a new approach to helping protect children and adolescents at increased risk for pneumococcal disease.”
The approval is based on data from the Phase 3 STRIDE-13 trial, which evaluated CAPVAXIVE compared to PPSV23 (pneumococcal 23-valent polysaccharide vaccine) in children and adolescents aged 2 through 17 years who completed a primary pediatric pneumococcal vaccination series and have one or more chronic medical conditions that put them at an increased risk of pneumococcal disease. See “STRIDE-13 Clinical Data Supporting Approval” below for additional details.
“While CAPVAXIVE was specifically designed for adults, it may also offer additional disease protection for this specific population of children and adolescents, when given after the primary pediatric pneumococcal vaccination series,” said Dr. Paula Annunziato, senior vice president, infectious diseases and vaccines, global clinical development, Merck Research Laboratories. “The approval of CAPVAXIVE for children and adolescents at increased risk for pneumococcal disease demonstrates our commitment to addressing this disease in people of all ages, not only addressing an unmet need, but also reinforcing Merck’s longstanding commitment to public health and infectious diseases.”
The expanded indication for CAPVAXIVE complements existing primary pediatric pneumococcal vaccination series for children and adolescents at increased risk for pneumococcal disease. According to a 2025 study of 2015-2019 CDC ABC surveillance data, including three groups, one of which consisted of children <18 years old (age range 31 to 109 months; n=219) with at least one risk condition for invasive pneumococcal disease (IPD) such as chronic heart disease, chronic lung disease, diabetes, and chronic kidney disease, CAPVAXIVE covers the serotypes responsible for ~79% of IPD cases. In this risk group, the 11 unique serotypes covered by CAPVAXIVE account for ~40% of IPD cases. These values are based on CDC epidemiologic data and do not reflect the efficacy of CAPVAXIVE. There are currently no studies evaluating the efficacy of CAPVAXIVE.
About CAPVAXIVE
CAPVAXIVE is Merck’s 21-valent pneumococcal conjugate vaccine indicated for active immunization for the prevention of invasive disease and pneumonia in adults 18 years of age and older and for the prevention of invasive disease in children and adolescents aged 2 through 17 years who have one or more chronic medical conditions that put them at an increased risk of pneumococcal disease. CAPVAXIVE was specifically designed to help address the Streptococcus pneumoniae serotypes predominantly responsible for IPD in adults, including eight unique serotypes, 15A, 15C, 16F, 23A, 23B, 24F, 31 and 35B compared to other approved pneumococcal vaccines. CAPVAXIVE is administered as a single dose.
CAPVAXIVE helps provide coverage against the serotypes responsible for approximately 82% of IPD cases in adults 50 years of age and older, compared to ~54% by PCV20, based on national-level CDC data from 2019-2023. These values are based on CDC epidemiologic data and do not reflect the efficacy of the respective vaccines. There are currently no studies comparing the efficacy of CAPVAXIVE and PCV20.
With this approval, CAPVAXIVE is also indicated for the prevention of invasive disease in children and adolescents aged 2 through 17 years who have one or more chronic medical conditions that put them at an increased risk for pneumococcal disease.
Select Safety Information for CAPVAXIVE in Children and Adolescents at Increased Risk for Pneumococcal Disease in the U.S.
Do not administer CAPVAXIVE to individuals with a history of a severe allergic reaction (e.g., anaphylaxis) to any component of CAPVAXIVE or to diphtheria toxoid.
Syncope may occur with administration of injectable vaccines.
Individuals with altered immunocompetence, including those receiving immunosuppressive therapy, may have a reduced immune response to CAPVAXIVE.
The most commonly reported (>10%) solicited adverse reactions in individuals 18 through 49 years of age who received CAPVAXIVE were: injection-site pain (73.1%), fatigue (36.0%), headache (27.5%), myalgia (16.4%), injection-site erythema (13.8%), and injection-site swelling (13.3%).
The most commonly reported (>10%) solicited adverse reactions in individuals 50 years of age and older who received CAPVAXIVE were: injection-site pain (41.2%), fatigue (19.7%), and headache (11.0%).
The most commonly reported (>10%) solicited adverse reactions in individuals 2 through 17 years of age who are at increased risk for pneumococcal disease were: injection-site pain (67.7%), injection-site erythema (24.3%), fatigue (20.1%), injection-site swelling (18.8%), headache (17.1%), malaise (13.3%), and irritability (11.6%).
Vaccination with CAPVAXIVE may not protect all vaccine recipients.
STRIDE-13 Clinical Data Supporting Approval
STRIDE-13 (NCT06177912) is a randomized, double-blind, active comparator-controlled Phase 3 study that evaluated individuals 2 through 17 years of age with one or more prespecified medical conditions (diabetes mellitus, chronic heart disease, chronic kidney disease, chronic liver disease, chronic lung disease) known to increase the risk of pneumococcal disease and who have previously completed a primary pneumococcal vaccination regimen at least 8 weeks prior to enrollment (n=874). Participants were randomized 3:2 to receive a single dose of CAPVAXIVE (n=527) or PPSV23 (n=347). Results from the study include:
CAPVAXIVE was noninferior to PPSV23 for the 12 shared serotypes and induced statistically significantly greater OPA GMTs compared to PPSV23 for the 9 serotypes unique to CAPVAXIVE; CAPVAXIVE also elicited immune responses to serotype 15B (cross-reactive to serotype 15C). In a post hoc analysis utilizing the same prespecified noninferiority criterion that was used for the shared serotypes, CAPVAXIVE was noninferior to PPSV23 for serotype 15B; The safety profile of CAPVAXIVE was generally comparable to PPSV23. Solicited adverse reactions following administration of CAPVAXIVE lasted a median of 2 days with most reactions lasting ≤3 days; The proportion of individuals reporting 1 or more serious adverse events (SAE) within 6 months postvaccination was 5.5% (n=29) in individuals vaccinated with CAPVAXIVE and 7.2% (n=25) in individuals vaccinated with PPSV23. There were no notable patterns or imbalances between vaccine groups for SAEs. One individual (0.2%) who received CAPVAXIVE had an SAE considered related to vaccination. This SAE was syncope (Grade 2, required hospitalization) and occurred approximately 3 minutes postvaccination. About Pneumococcal Disease
Pneumococcal disease is an infection caused by bacteria called Streptococcus pneumoniae. There are about 100 different types (referred to as serotypes) of pneumococcal bacteria, which can affect adults differently than children. Pneumococcal disease can be invasive or non-invasive. Non-invasive pneumococcal illnesses include pneumonia (when pneumococcal disease is confined to the lungs), whereas invasive pneumococcal illnesses include pneumococcal bacteremia (infection in the bloodstream), bacteremic pneumococcal pneumonia (pneumonia with bacteremia) and pneumococcal meningitis (infection of the coverings of the brain and spinal cord).
About Merck
At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on X (formerly Twitter), Facebook, Instagram, YouTube and LinkedIn.
Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA
This news release of Merck & Co., Inc., Rahway, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.
Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.
The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2025 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).
Please see the Prescribing Information for CAPVAXIVE (Pneumococcal 21-valent Conjugate Vaccine) at https://www.merck.com/product/usa/pi_circulars/c/capvaxive/capvaxive_pi.pdf and the Patient Information/Medication Guide for CAPVAXIVE at https://www.merck.com/product/usa/pi_circulars/c/capvaxive/capvaxive_ppi.pdf .
Item 1 of 2 A nurse fills up syringes in Michigan, U.S., April 8, 2022. REUTERS/Emily Elconin
[1/2]A nurse fills up syringes in Michigan, U.S., April 8, 2022. REUTERS/Emily Elconin Purchase Licensing Rights, opens new tab
CompaniesJune 18 (Reuters) - Drugmaker Merck (MRK.N), opens new tab said on Thursday the U.S. health regulator has approved an expanded use of its pneumococcal vaccine for children and teenagers who face a higher risk of catching the bacterial disease due to chronic health conditions.
Here are the details:
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The expanded approval covers patients aged 2 to 17 who have already completed a standard childhood pneumococcal vaccination schedule but have chronic conditions such as heart, lung, kidney, liver disease, or diabetes, which raise their risk of serious infections.
The vaccine, branded as Capvaxive, is designed to protect against multiple strains of the Streptococcus pneumoniae bacteria.
It was first approved by the U.S. Food and Drug Administration for adults in June 2024.
Pneumococcal disease, caused by the bacteria, can lead to serious illnesses including pneumonia, meningitis, and blood infections.
The disease spreads through contact with respiratory secretions such as saliva or mucus, and young children under five and adults 50 years and older are at higher risk of infection.
Thursday's approval was based on results from a late-stage trial involving 874 participants, where the new vaccine matched or outperformed PPSV23, an older pneumococcal vaccine. Side effects were generally short-lived, Merck said.
The vaccine is given as a single dose and is intended to complement existing childhood pneumococcal vaccines.
Reporting by Kamal Choudhury in Bengaluru; Editing by Sahal Muhammed
Our Standards: The Thomson Reuters Trust Principles., opens new tab
The decision makes Capvaxive the only pneumococcal conjugate vaccine specifically studied and indicated in the U.S. for this patient group.
Phase 3 STRIDE-13 data helped win approval. The data evaluated Capvaxive against PPSV23 in pediatric and adolescent patients at elevated risk of pneumococcal disease due to underlying medical conditions.
Merck said the trial formed the basis for the label expansion.
Capvaxive is already approved for adults 18 and older to help prevent invasive pneumococcal disease caused by multiple Streptococcus pneumoniae serotypes, as well as for at-risk patients aged 2–17.
The FDA had also previously granted accelerated approval for an adult pneumonia indication based on immune response data, with continued approval contingent on confirmatory clinical outcomes.
Coverage Targets Serotypes Linked To Pediatric Disease RiskAccording to a 2025 analysis of CDC ABC surveillance data from 2015 to 2019, Capvaxive covers serotypes associated with approximately 79% of invasive pneumococcal disease cases among children under 18 with at least one risk condition.
Merck added that the 11 serotypes uniquely covered by Capvaxive accounted for about 40% of invasive pneumococcal disease cases within that risk group.
In March, Pfizer Inc. (NYSE:PFE) reported positive Phase 2 data for its investigational 25-valent pneumococcal conjugate vaccine candidate.
The vaccine candidate, known as 25vPnC, generated notably stronger immune responses against serotype 3, a major remaining cause of invasive pneumococcal disease and complicated pneumonia in children.
MRK Stock Price Activity: Merck & Co shares were down 2.95% at $112.03 at the time of publication on Thursday, according to Benzinga Pro data.
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Merck (MRK - Free Report) closed at $113.87 in the latest trading session, marking a -1.36% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 1.09%. On the other hand, the Dow registered a gain of 0.14%, and the technology-centric Nasdaq increased by 1.91%.
Shares of the pharmaceutical company have appreciated by 2.16% over the course of the past month, underperforming the Medical sector's gain of 3.16%, and outperforming the S&P 500's gain of 0.29%.
The investment community will be closely monitoring the performance of Merck in its forthcoming earnings report. The company is scheduled to release its earnings on August 4, 2026. The company's earnings per share (EPS) are projected to be $2.1, reflecting a 1.41% decrease from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $16.28 billion, reflecting a 3.02% rise from the equivalent quarter last year.
MRK's full-year Zacks Consensus Estimates are calling for earnings of $5.17 per share and revenue of $66.79 billion. These results would represent year-over-year changes of -42.43% and +2.73%, respectively.
Investors should also note any recent changes to analyst estimates for Merck. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Merck is currently a Zacks Rank #3 (Hold).
In the context of valuation, Merck is at present trading with a Forward P/E ratio of 22.34. This represents a premium compared to its industry average Forward P/E of 15.47.
Also, we should mention that MRK has a PEG ratio of 2.6. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 2.6 as of yesterday's close.
The Large Cap Pharmaceuticals industry is part of the Medical sector. With its current Zacks Industry Rank of 97, this industry ranks in the top 40% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
Tulisokibart is the first anti-TL1A monoclonal antibody to demonstrate clinical remission at 12 weeks in moderately to severely active UC in a Phase 3 trial
Tulisokibart was designed to help address immuno-fibrosis, a key driver of disease progression in inflammatory bowel disease (IBD) and other immune-mediated inflammatory conditions
RAHWAY, N.J.--(BUSINESS WIRE)--Merck (NYSE: MRK), known as MSD outside of the United States and Canada, today announced positive topline results from the Phase 3 ATLAS-UC induction-only study (Study 2) evaluating tulisokibart (MK-7240), an investigational humanized monoclonal antibody targeting tumor necrosis factor-like cytokine 1A (TL1A), in patients with moderately to severely active UC. The study successfully met its primary endpoint of clinical remission according to the Modified Mayo Score (MMS) at week 12, as well as key secondary endpoints. Consistent with previously reported Phase 2 studies, no safety concerns were identified.
“These positive Phase 3 induction results for tulisokibart are the first for an anti-TL1A biologic. They represent an important step forward for patients with moderately to severely active ulcerative colitis who – despite available treatments – continue to experience symptoms, and do not achieve clinical remission,” said Dr. Eliav Barr, senior vice president, head of global clinical development and chief medical officer, Merck Research Laboratories. “These results reinforce the potential of this novel approach designed to help address immuno-fibrosis, a key driver of chronic immune dysregulation and disease progression in ulcerative colitis.”
Results from the ATLAS-UC Study 2 will be presented with the results from the ongoing induction and maintenance study (Study 1) at an upcoming scientific congress and will be shared with regulatory authorities.
Tulisokibart has the broadest development program in the novel anti-TL1A class and is currently being evaluated in seven disease indications. Phase 3 studies include ATLAS-UC (NCT06052059) in UC and ARES-CD (NCT06430801) in Crohn’s disease (CD). Phase 2 studies are evaluating tulisokibart in systemic sclerosis-associated interstitial lung disease (SSc-ILD) (NCT05270668), rheumatoid arthritis (RA) (NCT07176390), psoriatic arthritis (PsA) (NCT07486960), radiographic axial spondyloarthritis (r-axSpA) (NCT07133633) and hidradenitis suppurativa (HS) (NCT06956235). For an overview of Merck’s clinical development program in immunology, please click here.
About ATLAS-UC
ATLAS-UC (NCT06052059) is a Phase 3, randomized, double-blind, placebo-controlled program designed to evaluate the efficacy and safety of tulisokibart in adults with moderately to severely active ulcerative colitis (UC). The program consists of two independent studies: Study 1, which includes both induction and maintenance treatment, and Study 2, which includes only induction treatment.
Study 2 is investigating whether at least one tulisokibart dose level is superior to placebo in the proportion of participants achieving clinical remission, according to the MMS at week 12. Participants were randomized to either receive a high dose IV of tulisokibart, a low dose IV of tulisokibart or an IV placebo. Key secondary endpoints at week 12 include percentage of patients who experienced endoscopic improvement, percentage of patients who achieved clinical response per MMS and percentage of patients who demonstrated histologic-endoscopic mucosal improvement.
About Ulcerative Colitis
Ulcerative colitis (UC) is one of the most common types of IBD and is a chronic progressive immuno-fibrotic disease that affects the large intestine and rectum. Recent evidence suggests that UC involves not only the mucosa but also deeper transmural changes with fibrosis in the colorectal wall. Millions of people worldwide live with UC, and symptoms can be unpredictable and may significantly impact quality of life. UC often follows a relapsing and remitting course, with symptoms that may include diarrhea, rectal bleeding, abdominal pain, bowel urgency and weight loss. Many patients with UC do not achieve adequate disease control despite the availability of currently approved treatments.
About Tulisokibart
Tulisokibart is an investigational humanized monoclonal antibody directed to a novel target, TL1A, that is associated with both intestinal inflammation and fibrosis (immuno-fibrosis). Tulisokibart is thought to bind both soluble and membrane-bound TL1A. Merck is developing tulisokibart for the treatment of immune-mediated inflammatory diseases, including UC, CD, SSc-ILD, RA, PsA, r-axSpA and HS.
About Immuno-fibrosis
Immuno-fibrosis is the process by which inflammation and fibroblast activation drive disease activity and progression in many autoimmune conditions, including UC. Immuno-fibrotic diseases are chronic progressive conditions marked by immune dysregulation, inflammation and fibroblast activation. The impact of immuno-fibrosis may vary by disease, stage and patient. The complexity of immuno-fibrosis underscores the need for treatment options that address both inflammation and fibrosis. Merck is advancing research to deepen the understanding of immuno-fibrosis and help translate the science into new approaches.
Merck’s Commitment to Immunology
Advances in our understanding of human biology have led to the emergence of innovative medicines and new modalities that aim to change approaches to the treatment of immune-mediated inflammatory diseases. Merck scientists are leveraging deep expertise in immunology to discover and develop therapies to help people living with these conditions. Our research is focused on investigating novel targets such as TL1A and CD30L, as well as newer modalities like T-cell engagers, and exploring their potential across a range of immune-mediated inflammatory diseases.
About Merck
At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on X (formerly Twitter), Facebook, Instagram, YouTube and LinkedIn.
Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA
This news release of Merck & Co., Inc., Rahway, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.
Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.
The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2025 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).
The Merck logo is seen at a gate to the Merck & Co campus in Rahway, New Jersey, U.S., July 12, 2018. REUTERS/Brendan McDermid Purchase Licensing Rights, opens new tab
June 22 (Reuters) - Merck (MRK.N), opens new tab said on Monday its experimental drug met the main goal and key secondary goals in a late-stage trial in patients with a type of inflammatory bowel disease.
At 12 weeks, the drug, tulisokibart, showed clinical remission in symptoms of ulcerative colitis.
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Ulcerative colitis is a type of chronic bowel disease that causes long-lasting inflammation and ulcers in the innermost lining of the large intestine and rectum.
Merck said patients who received the drug also showed signs of improvement in the condition of their colon and reduced inflammation in tissue samples after 12 weeks.
At least two analysts said the results appeared positive, but noted the lack of quantitative details from the trial.
Citi analyst Geoff Meacham said Merck did not disclose numbers on how many patients went into remission, how different doses performed, how the drug compared with placebo, or how it worked in specific patient groups.
The lack of data, for now, "limits competitive read-through" with rival treatments, Meacham added.
Tulisokibart is designed to block TL1A, a protein involved in immune activity and scar-like tissue buildup.
RBC Capital Markets analyst Trung Huynh said the results mark the first positive late-stage data for an anti-TL1A drug, giving Merck an early lead in a drug class seen as a "compelling therapeutic option" for inflammatory bowel disease.
Huynh expects a 2027 launch and $5.2 billion in annual sales in 2034.
Merck said results from the trial will be presented with those from an ongoing maintenance study at an upcoming scientific congress.
Tulisokibart is currently being tested as a treatment for seven diseases, including ulcerative colitis, Merck said.
Reporting by Christy Santhosh in Bengaluru; Editing by Leroy Leo
Our Standards: The Thomson Reuters Trust Principles., opens new tab
I continue to believe that Merck & Co., Inc. has an attractive risk/reward profile. Ten days ago, on June 12, the FDA approved both Keytruda and Keytruda Qlex in combination with Welireg for the treatment of a type of kidney cancer called earlier-stage ccRCC. Overall, this "trio" generated $8.23 billion in sales for Merck in Q1, up 12.1% year-over-year.
Key Takeaways AbbVie's Skyrizi and Rinvoq are driving growth and are expected to exceed $31 billion in sales in 2026.MRK is expanding its pipeline and expects to launch 20 new drugs by 2030 to offset Keytruda's patent expiry.ABBV has navigated Humira's patent cliff and expects high single-digit revenue growth through 2029. Merck (MRK - Free Report) and AbbVie (ABBV - Free Report) are among the leading pharmaceutical companies, with well-established franchises in oncology and immunology, respectively. Beyond its core businesses, AbbVie has expanded into aesthetics, neuroscience and eye care, while Merck has built a more diversified portfolio that includes vaccines, neuroscience, diabetes, virology and animal health.
Oncology generates more than 60% of Merck’s pharmaceutical revenues, with its blockbuster cancer therapy, Keytruda, contributing roughly 55% of pharmaceutical sales. For AbbVie, immunology remains the primary growth engine, led by blockbuster therapies such as Humira, Skyrizi and Rinvoq, which together account for nearly half of the company’s total revenues.
Both companies continue to post solid revenue and earnings growth and possess strong late-stage pipelines. The key question for investors is which stock offers the better investment opportunity—a decision that warrants a closer examination of their fundamentals, growth prospects and associated risks.
The Case for AbbVie StockAbbVie has successfully navigated the loss of exclusivity (LOE) of its blockbuster drug, Humira, which once generated more than 50% of its total revenues. It has accomplished this by launching two other successful new immunology medicines, Skyrizi and Rinvoq, which are performing extremely well, bolstered by approvals in new indications, and should support top-line growth in the next few years.
In 2026, AbbVie expects combined Skyrizi and Rinvoq sales of more than $31 billion. Combined, Skyrizi and Rinvoq are expected to deliver more than 20% growth in 2026. However, AbbVie expects a low single-digit pricing headwind for both Skyrizi and Rinvoq in 2026 and over the next few years. Moreover, the launch of J&J’s (JNJ - Free Report) new oral pill for moderate-to-severe plaque psoriasis, Icotyde, has increased competitive pressure on Skyrizi, which may affect the product’s prescribing trends. However, AbbVie seems confident that it can navigate competition from Icotyde.
AbbVie’s neuroscience portfolio is also contributing to top-line growth, driven by higher sales of Botox Therapeutic, depression drug Vraylar, newer migraine drugs Ubrelvy and Qulipta and new Parkinson’s disease drug, Vyalev.
AbbVie has built a substantial oncology franchise with Imbruvica and Venclexta. However, its oncology sales have slightly slowed down.
The company has been on an acquisition spree over the past couple of years to bolster the early-stage pipeline that should drive long-term growth. It is signing several M&A deals in the immunology space, its core area, and some early-stage deals in oncology and neuroscience. AbbVie also boasts a robust pipeline and expects important data readouts, regulatory submissions and approvals throughout 2026
The company faces some near-term headwinds like Humira’s biosimilar erosion, slowdown in oncology sales and soft sales of its Aesthetics unit for the past couple of years due to continued macro challenges and weakened consumer sentiment.
The Case for MRK StockMerck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda, approved for several types of cancers, has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then.
The company expects Keytruda to achieve peak sales of $35 billion by 2028. Merck’s other oncology drugs, Welireg, AstraZeneca-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
Merck’s Animal Health business is also a key contributor to its top-line growth, with sales expected to more than double by mid-2030s.
Its phase III pipeline has almost tripled since 2021, supported by in-house pipeline progress as well as the addition of candidates through M&A deals. Merck expects to launch 20 new drugs by 2030, with many already launched.
Some key new products with blockbuster potential are its 21-valent pneumococcal conjugate vaccine, Capvaxive, and pulmonary arterial hypertension drug, Winrevair. Both products have witnessed a strong launch and have the potential to generate significant revenues over the long term.
The company has accelerated acquisitions over the past year as it prepares for the 2028 patent expiry of Keytruda. The company strengthened its pipeline with the 2025 acquisition of Verona Pharma, adding COPD drug Ohtuvayre. The 2026 buyouts of Cidara Therapeutics and Terns Pharmaceuticals added late-stage influenza and hematology/cancer pipeline assets, respectively.
Sales of Merck’s second-largest product, its HPV vaccine, Gardasil, have been declining due to continued weak sales performance in China. Sales of Gardasil are declining in China due to weak demand trends amid an economic slowdown. The company is also seeing lower demand for the vaccine in Japan. Gardasil sales are not expected to improve in 2026.
Sales of some other Merck vaccines, like Proquad, M-M-R II, Varivax, Rotateq and Vaxneuvance, also declined in the first quarter.
Merck is heavily reliant on Keytruda. Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, the company is excessively dependent on the drug. Keytruda’s core U.S. patent is expected to expire around 2028, with additional patents expiring slightly after that. Keytruda is expected to face significant biosimilar competition around 2028-2029. Once biosimilars enter, Keytruda’s sales are likely to decline sharply.
MRK is seeing declining sales of key products such as Januvia/Janumet, Isentress and Dificid due to weak demand, patent expirations and rising generic competition. The company expects generic erosion of Januvia/Janumet, Bridion and Dificid to reduce 2026 revenues by around $2.5 billion.
Nonetheless, Merck’s new products, Winrevair, Welireg and Capvaxive, key pipeline progress and expansion of its respiratory and infectious disease and oncology portfolios through the acquisitions of Verona Pharma, Cidara Therapeutics and Terns Pharmaceuticals have improved its long-term growth prospects.
How Do Estimates Compare for ABBV & MRK?The Zacks Consensus Estimate for ABBV’s 2026 sales and EPS implies a year-over-year increase of 10.1% and 43.0%, respectively. EPS estimates for 2026 have been stable at $14.30 over the past 60 days, while those for 2027 have risen from $16.15 to $16.30 over the same timeframe.
ABBV Estimate MovementImage Source: Zacks Investment Research
The Zacks Consensus Estimate for Merck’s 2026 sales and EPS implies a year-over-year increase of 2.7% and a decrease of 42.4%, respectively. Estimates for MRK’s 2026 earnings have risen from $5.14 per share to $5.17 per share over the past 60 days, while those for 2027 have declined from $9.87 to $9.85 per share over the same timeframe.
MRK Estimate MovementImage Source: Zacks Investment Research
Price Performance and Valuation of ABBV & MRKYear to date, AbbVie’s stock has declined 5.2%, while Merck’s stock has risen 8.2%. The industry has witnessed an increase of 1.3% in the same time frame.
Image Source: Zacks Investment Research
MRK is more expensive than ABBV, going by the price/earnings ratio. AbbVie’s shares currently trade at 14.2 forward earnings, lower than 15.42 for Merck. AbbVie and Merck are both priced lower than 17.06 for the industry.
Image Source: Zacks Investment Research
Both Merck and AbbVie are cheaper than other large drugmakers like Eli Lilly (LLY - Free Report) , AstraZeneca and J&J.
AbbVie’s dividend yield of 3.2% is higher than MRK’s 2.99%.
Image Source: Zacks Investment Research
ABBV vs. MRK: Which is a Better Pick?Both AbbVie and Merck have a Zacks Rank #3 (Hold), which makes choosing one stock extremely difficult.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AbbVie has faced its biggest challenge — Humira’s patent cliff — quite well and looks well-positioned for continued strong growth in the years ahead. ABBV delivered robust net sales growth in 2025, which was just the second full year following the Humira LOE in the United States. AbbVie expects another year of robust growth in 2026. It expects total revenues to rise around 10% in 2026. It expects high single-digit revenue growth through 2029, as the company has no significant LOE events for the rest of this decade.
Merck’s new products and strong progress in its pipeline have increased confidence that the company may be able to maintain growth even after Keytruda loses exclusivity.
However, Merck faces several near-term challenges, including persistent challenges for Gardasil in China and rising competitive and generic pressure on some of its drugs. There is still considerable uncertainty regarding the post-Keytruda era. Unlike Merck, AbbVie has already demonstrated its ability to navigate a major patent cliff and successfully replace lost revenues with newer products. This makes AbbVie a winner over Merck.
NEW YORK--(BUSINESS WIRE)--Merck, through the company’s Merck for Mothers initiative, and Mae are collaborating on a multi-state effort to expand and sustain the community-based doula workforce, with a goal of advancing maternal health equity and access for those experiencing the most disparate outcomes.
The collaboration will advance doula training, professional development, and ongoing administrative support towards Medicaid participation for community doulas. It will also allow Mae to extend the reach of its tech-enabled community care model to sustain doulas’ insurance participation long-term.
Nationally, one in three births are C-sections, and close to one in ten babies are born preterm. For Medicaid and at-risk populations, the statistics are even more dire. Doula support has been proven to mitigate preterm birth, medically unnecessary C-sections, and address maternal mental health needs, particularly for birthing people of color. Mae’s solution serves as a layer of infrastructure to address high-risk maternity, including risk tracking, coordination of care and benefits, and the ability to provide targeted community-based interventions that improve maternal health outcomes.
With funding from Merck for Mothers, Mae will oversee the operational and administrative needs of newly trained doulas across California, Georgia, Illinois, and Texas. Each of these states represents a unique profile regarding the regulatory status of doula coverage, levels of access and adoption, and racial and socioeconomic outcome disparities. A regional approach supports tailored workforce development strategies and downstream sustainability, aiming to bolster both care access and utilization insights that can inform evolving benefit design and regulatory decisions.
”Through Merck for Mothers, we are committed to helping improve maternal health outcomes in the U.S. and globally, especially among underserved communities,” said Jacquelyn Caglia, Head, Merck for Mothers. “We are proud to support Mae in strengthening the doula workforce and helping to make sustainable improvements in maternal health across the U.S.”
“Over the past five years, I have seen firsthand how deeply impactful community-doula participation in care has been to the high-risk mothers Mae serves, and also how complex and burdensome Medicaid participation can be for this workforce. To combat longstanding disparities in outcomes, particularly for communities of color, we strive to make this experience easier and to meaningfully impact access to the critical services doulas provide. We are grateful to partner with Merck for Mothers on this effort, and for their commitment to advancing maternal health equity.” ~Maya Hardigan, Founder and CEO, Mae
The collaboration between Merck and Mae represents a shift from temporary pilot programs towards a long-term structural investment in the birth worker economy. By training new doulas and providing the tech-enabled infrastructure to sustain their work, this initiative is designed to create a blueprint for the way public-private partnerships can move the needle on maternal health outcomes across the United States.
About Merck Merck for Mothers is Merck’s global initiative to help create a world where no woman has to die while giving life. Applying Merck’s business and scientific resources, the initiative collaborates with partners to improve the health and well-being of women during pregnancy, childbirth and the postpartum period. For more information, visit www.merckformothers.com.
About Mae Mae is a digital health solution on a mission to improve the health and quality of life for underserved mothers, babies, and those who love them. Mae has created a space where complete digital pregnancy care meets culturally congruent, on-the-ground doula support. Mae addresses access gaps and bolsters physical and emotional well-being through continuous engagement, risk assessment, early symptom awareness, and a community-led support model. In addressing whole-person care and focusing on self-advocacy, education, and community, Mae seeks to improve outcomes and experiences for pregnant people while reducing clinical costs of care at an impactful scale.
For more information about Mae, please visit meetmae.com and @maehealthinc on IG.
Key Takeaways Merck said tulisokibart met the primary and key secondary endpoints in late-stage UC Study 2.MRK added tulisokibart via its $10.8 billion Prometheus Biosciences acquisition in 2023.Merck is also testing tulisokibart in Crohn's disease and other inflammatory conditions. Merck (MRK - Free Report) announced positive results from Study 2 of the late-stage ATLAS-UC study, which evaluated tulisokibart, its experimental human antibody targeting tumor necrosis factor-like cytokine 1A (TL1A), in patients with moderately to severely active ulcerative colitis (UC).
Study 2 evaluated tulisokibart as an induction therapy and met its primary endpoint of clinical remission at week 12. The study also met key secondary endpoints, including measures of endoscopic improvement and clinical response. However, Merck did not disclose detailed efficacy data supporting these outcomes.
The company plans to present the complete results from Study 2, along with data from the ongoing Study 1, at a future medical meeting. Study 1 is evaluating tulisokibart as both an induction and maintenance therapy, with patients being followed through week 52.
The positive results mark an important milestone for Merck as it seeks to diversify its portfolio beyond the blockbuster cancer drug Keytruda, which is expected to go off-patent in 2028. Keytruda currently accounts for roughly half of the company’s total revenues.
MRK’s Stock PerformanceYear to date, the company’s shares have risen nearly 10% compared with the industry’s 3% growth.
Image Source: Zacks Investment Research
More on Merck’s TulisokibartThe drug was added to Merck's pipeline in 2023 through its $10.8 billion acquisition of Prometheus Biosciences and is considered one of the company's important late-stage assets.
Apart from UC, tulisokibart is also being evaluated in a late-stage study for Crohn's disease. It is being developed in several mid-stage studies across multiple immune-mediated inflammatory diseases in rheumatology and dermatology. These include systemic sclerosis-associated interstitial lung disease, hidradenitis suppurativa, radiographic axial spondyloarthritis, rheumatoid arthritis and psoriatic arthritis.
Tulisokibart targets TL1A, a novel pathway involved in intestinal inflammation and fibrosis, that has emerged as a promising therapeutic target in inflammatory bowel disease. While Merck is among the leaders in this space, competition is intensifying. Other companies developing anti-TL1A therapies include Sanofi (SNY - Free Report) and Teva Pharmaceuticals (TEVA - Free Report) with duvakitug, as well as Spyre Therapeutics (SYRE - Free Report) .
MRK’s Zacks RankMerck currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways Exelixis reported a non-significant OS trend in favor of zanzalintinib plus Tecentriq in NLM patients.STELLAR-303 previously met its other primary endpoint with significant OS improvement in the ITT group.EXEL is advancing zanzalintinib through multiple studies and collaborations with Merck and Natera. Shares of Exelixis, Inc. (EXEL - Free Report) were down 1.08% after the company announced disappointing results from the final analysis of the dual primary endpoint of overall survival (OS) in the subset of patients without active liver metastases (non-liver metastases, NLM) in the late-stage STELLAR-303 study.
The phase III STELLAR-303 study is a global, multicenter, randomized, open-label study evaluating zanzalintinib plus Roche’s (RHHBY - Free Report) Tecentriq (atezolizumab) versus regorafenib in previously treated non-microsatellite instability (MSI)-high metastatic colorectal cancer (mCRC).
However, the study showed a non-statistically significant trend in OS favoring the combination in the NLM subpopulation. Median OS was 15.9 months for patients treated with the combination therapy compared with 12.7 months for those receiving regorafenib.
The stock was trading down in after-market trading as well.
Year to date, Exelixis’ shares have risen 17.2% against the industry’s decline of 1.7%.
Image Source: Zacks Investment Research
EXEL’s STELLAR-303 Study DetailsZanzalintinib is a novel oral kinase inhibitor that inhibits the activity of the TAM kinases (TYRO3, AXL, MeR), MET and VEGF receptors.
Patients were randomized 1:1 to receive either zanzalintinib in combination with atezolizumab (n=451) or regorafenib (n=450) in the STELLAR-303 study.
The study has two co-primary endpoints: overall survival (OS) in the intent-to-treat (ITT) population and OS in the NLM subgroup of patients.
The ITT population includes all randomized patients, irrespective of liver metastasis status. The NLM subgroup comprises patients who were determined by investigators to have no active liver metastases at baseline.
Secondary endpoints include progression-free survival, objective response rate and duration of response in the ITT population and in the NLM subgroup of patients.
The final analysis showed that the safety profile of zanzalintinib in combination with Tecentriq in the NLM subgroup was consistent with that previously reported in the ITT population. No new safety signals were identified.
In June 2025, EXEL announced that STELLAR-303 met its other dual primary endpoint, demonstrating a statistically significant improvement in OS in the ITT population, which included all randomized patients regardless of the presence of active liver metastases.
EXEL’s new drug application seeking approval of zanzalintinib in combination with Tecentriq for the treatment of patients with mCRC is under review in the United States. The targeted population includes patients who were previously treated with fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy, and, if RAS wild-type, an anti-epidermal growth factor receptor therapy.
The agency has set a target action date of Dec. 3, 2026. However, the disappointing results from the final analysis of OS in the NLM subset of patients create uncertainty regarding the drug’s approval.
Roche’s Tecentriq is a cancer immunotherapy that is approved around the world, either alone or in combination with targeted therapies and/or chemotherapies, for various types of cancer.
More on EXEL’s Efforts to Advance ZanzalintinibEXEL is looking to develop new drugs and reduce dependence on its lead drug, Cabometyx. To that end, zanzalintinib represents the company’s most significant near-term catalyst.
Last month, EXEL announced a clinical development collaboration with pharma giant Merck & Co. (MRK - Free Report) to evaluate, in combination with subcutaneous Keytruda Qlex, in the planned phase III STELLAR-316 study for resected stage II/III colorectal cancer (CRC).
Under the agreement, Exelixis will sponsor the STELLAR-316 study, while Merck will provide Keytruda Qlex for use in the study.
MRK’s blockbuster drug Keytruda (pembrolizumab) is approved for several types of cancer.
Exelixis expects to initiate the STELLAR-316 study in mid-2026.
The late-stage STELLAR-316 will evaluate zanzalintinib with and without Keytruda Qlex in patients with resected stage II/III CRC who, following definitive therapy, have tested positive for molecular residual disease (MRD+) and have no radiographic evidence of disease.
Earlier this year, Exelixis partnered with Natera (NTRA - Free Report) , a global leader in cell-free DNA and precision medicine, for this study.
Natera will supply its Signatera assay to identify eligible MRD-positive patients for enrollment, further integrating precision medicine into the program.
We note that Exelixis had collaborated with MRK in October 2024 to advance zanzalintinib.
In April 2026, MRK initiated LITESPARK-034, a phase III study evaluating zanzalintinib plus Welireg (belzutifan) versus Welireg and placebo in previously treated advanced renal cell carcinoma (RCC) patients who progressed after PD-1/L1 and VEGFR-TKI therapies.
This marks the second Merck-sponsored phase III study under the collaboration, following LITESPARK-033 (launched in December 2025), which is assessing the combination against cabozantinib in first-line advanced RCC post-adjuvant immunotherapy.
Exelixis also announced two additional studies of zanzalintinib — STELLAR-202, a planned phase II trial evaluating the drug in combination with Keytruda as maintenance therapy in squamous non-small cell lung cancer, and a new expansion cohort in the ongoing phase Ib/II STELLAR-002 study assessing zanzalintinib plus docetaxel in metastatic castration-resistant prostate cancer patients with measurable disease.
On June 17, 2026, we present a DCF analysis for Electronic Arts Inc EA , a company that has shown a price performance of +34.9% over the past year, despite a year-to-date decline of -0.5%. The current price of EA stands at $203.02.
DCF Earnings-based intrinsic value indicates a significant overvaluation with a margin of safety of -405.4%. DCF FCF-based intrinsic value suggests a modest overvaluation with a margin of safety of -72.7%. GF Score™ of 90/100 indicates a high reliability of the DCF inputs. What Is EA Worth? DCF Earnings-Based Model The DCF earnings-based model for Electronic Arts Inc EA utilizes a two-stage approach to estimate the intrinsic value of the stock. The first stage accounts for the growth phase over the next ten years, while the second stage considers the terminal phase for the subsequent ten years.
Parameter Value Current EPS (TTM, excl. non-recurring) $3.48 10-Year Growth Rate 2.3% 10-Year Treasury Rate 4.43% Discount Rate (ceil(Treasury) + 6%) 11% Terminal Growth Rate 4% In the first stage, the EPS is expected to grow at a rate of 2.3% per year for ten years, discounted at a rate of 11%. The calculated value for this growth stage is $22.84 per share. In the second stage, after year ten, the growth rate slows to a terminal growth rate of 4% for another ten years, also discounted at 11%, yielding a terminal stage value of $10.94 per share.
Stage Description Value Growth Stage (Years 1-10) EPS growing at 2.3%, discounted at 11% $22.84 Terminal Stage (Years 11-20) 4% terminal growth, discounted at 11% $10.94 Intrinsic Value Growth + Terminal $33.78 With the current price at $203.02, the intrinsic value calculated at $40.17 indicates that EA is significantly overvalued, with a margin of safety of -405.4%. It is important to note that GuruFocus uses EPS without non-recurring items, as research shows that stock prices correlate more closely with earnings than with free cash flow. For further analysis, you can visit the EA DCF Calculator.
What Does the Free Cash Flow DCF Say? The Free Cash Flow (FCF)-based intrinsic value for Electronic Arts Inc is calculated at $117.59. When comparing this with the earnings-based intrinsic value of $33.78, the two models suggest a modest overvaluation, with a margin of safety of -72.7%. This divergence highlights the importance of considering multiple valuation approaches when assessing a company's worth.
How Does GF Value™ Compare to the DCF Models? The GF Value™ for Electronic Arts Inc is calculated at $159.55, providing a third perspective on valuation. GF Value™ is GuruFocus' proprietary measure, derived from historical trading multiples, past business growth, and future performance estimates. All three models—DCF earnings, DCF FCF, and GF Value™—indicate that EA is overvalued, reinforcing the need for caution among investors. For more details, visit the GF Value™ page.
What Does EA's GF Score™ Tell Us? The GF Score™ ranks stocks from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have been found to generate higher long-term returns (backtested 2006-2021).
Metric Rating GF Score™ 90/100 Financial Strength 8/10 Profitability 9/10 Growth 8/10 Valuation 5/10 Momentum 9/10 The predictability rank for EA is 2/5 stars, indicating that higher predictability means the DCF model is more reliable for this stock. For more insights, visit the EA stock page.
Key Assumptions and Limitations It is important to note that DCF models are highly sensitive to growth rate and discount rate assumptions. Stocks with low predictability ratings, such as EA, produce less reliable DCF estimates. The terminal growth rate of 4% is a simplifying assumption that may not fully capture future market conditions.
What This Means for Investors In conclusion, the DCF earnings model indicates a significant overvaluation, while the FCF model suggests a modest overvaluation. The GF Value™ also supports this perspective, indicating that EA is overvalued. Overall, investors should exercise caution when considering EA as a potential investment. For the full DCF analysis, visit the EA DCF Calculator. You can also explore the GF Value™ page, or use the GuruFocus Stock Screener to find undervalued predictable companies.
Frequently Asked Questions What is EA's intrinsic value based on DCF?
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
A group of investors including Saudi Arabia's Public Investment Fund has sought EU antitrust approval for its $55 billion acquisition of videogame developer Electronic Arts , according to a European Commission filing on Wednesday.
Powered by Fighters, UFC® 6 Brings UFC Stars to Life with Evolved Striking, Authentic Movement, Deeper Fighter Individuality, and New Immersive Storytelling Modes
REDWOOD CITY, Calif.--(BUSINESS WIRE)--Today, Electronic Arts Inc. (NASDAQ: EA) launches EA SPORTS™ UFC® 6 on PlayStation®5 and Xbox Series X|S, delivering next-level fighter fidelity to fans worldwide. Cutting-edge Markerless Capture and next-gen Sapien Technology make UFC superstars look, move, and fight like their real-life counterparts, while the all-new Flow State mechanic turns standout skills into in-game impact. Real-Time Contact brings every exchange to life with Frostbite™-powered ragdoll physics, and immersive new game modes like Hall of Legends and The Legacy let players experience the stories of UFC greats or carve their own path from backrooms to the bright lights.
“EA SPORTS™ continues to take the game to the next level,” said UFC President and CEO Dana White. “Every new edition gets better and better. The intensity, movement, and overall gameplay are next level, bringing fight fans a fun and realistic gameplay experience.”
“UFC 6 is a true leap forward for the franchise, and we are excited for fans to feel that difference from the moment they step into the virtual Octagon,” said Nate McDonald, Lead Producer of EA SPORTS™ UFC 6. “Markerless Capture and Sapien Technology set a new bar for authenticity, while new features like Signature Strikes and Flow State make every fighter feel more distinct, adding up to the most immersive UFC experience we’ve ever created.”
EA SPORTS™ UFC 6 is packed with new features and technology:
Next Level Fighter Fidelity: Everyone's fight looks different. Cutting-edge Markerless Capture and Sapien Technology make the fighters in UFC 6 look, move, strike and react in true-to-life fashion. Master each fighter and discover their strengths. Flow State: This all-new feature introduces 30 unique fighter Flow States built around each athlete's authentic strengths, tendencies and fight IQ. When players lean into a fighter's style, like pressure fighting, counter striking or grappling dominance, they build momentum that unlocks an advantage. Flow State turns identity into impact, forcing real-time adjustments as momentum shifts and the fight evolves. Real-Time Contact: Experience all-new Frostbite™ powered ragdoll physics, contact windows, damage and hit reactions. Real-Time Contact delivers more precise, fair and visceral exchanges. Hall of Legends: An immersive experience that explores the stories, environments and moments that shaped the careers of three UFC superstars. Relive iconic fights through a seamless mix of live footage, cinematic scenes and gameplay in this game-changing celebration of MMA greatness. The Legacy: An interactive prologue to Career Mode allowing players to shape the journey of MMA prospect Chris Carter. Players will navigate intense drama and fierce rivalries as they guide Carter from the regional fight scene to the UFC, all in pursuit of championship glory. Career Mode: Players can choose to jump into the fire against today’s top-ranked UFC contenders with their Created Fighter, favorite UFC star or Chris Carter from The Legacy. UFC Career Mode now features an expanded decision-driven system, with 10 times as many choices as UFC 5, each with higher stakes and a bigger impact on progression and legacy. Players can now fight for and defend two titles simultaneously, as well as duke it out for the BMF belt. The Gym: A centralized hub where players can recruit and train UFC stars, then level up their gym across any game mode to earn new trainers, boosts and exclusive cosmetic rewards that can be equipped for profiles or in Fighter Select as they develop and manage their team. Crossplay: For the first time in franchise history, UFC 6 introduces crossplay functionality, allowing players on PlayStation 5 and Xbox Series X|S to compete against each other in online modes. With the Ultimate Edition, players can step into the Octagon with instant access to Randy Couture and Ken Shamrock, plus the Fighter Pass, Expansion Pass, VIP Pass and more. Visit http://ea.com/games/ufc/ufc-6 and follow our social channels to learn more and stay up-to-date on all things UFC 6.
EA Play members on Xbox and PlayStation can try UFC 6 for up to 10 hours*. In addition, a limited-time EA Play Welcome Pack is available for members to claim, filled with cosmetic items to help them stand out from the competition. For more information on EA Play, please visit https://www.ea.com/ea-play.
PRESS ASSETS ARE AVAILABLE AT EAPressPortal.com
About Electronic Arts
Electronic Arts (NASDAQ: EA) is a global leader in digital interactive entertainment. The Company develops and delivers games, content and online services for Internet-connected consoles, mobile devices and personal computers.
In fiscal year 2026, EA posted GAAP net revenue of approximately $7.5 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS FC™, Battlefield™, Apex Legends™, The Sims™, EA SPORTS™ Madden NFL, EA SPORTS™ College Football, Need for Speed™, Dragon Age™, Titanfall™, Plants vs. Zombies™ and EA SPORTS F1 ®. More information about EA is available at www.ea.com/news.
EA, EA SPORTS, EA SPORTS FC, Battlefield, Need for Speed, Apex Legends, The Sims, Dragon Age, Titanfall, and Plants vs. Zombies are trademarks of Electronic Arts Inc. John Madden, NFL, and F1 are the property of their respective owners and used with permission.
About UFC®
UFC® is the world's premier mixed martial arts (MMA) organization, with more than 700 million fans and approximately 363 million social media followers. The organization produces more than 40 live events annually in some of the most prestigious arenas around the world, while distributing programming to an estimated 1 billion broadcast and digital households across 210 countries and territories. UFC's athlete roster features the world's best MMA athletes, representing more than 75 countries. The organization's digital offerings include UFC FIGHT PASS®, one of the world's leading streaming services for combat sports. UFC is part of TKO Group Holdings (NYSE: TKO) and is headquartered in Las Vegas, Nevada. For more information, visit UFC.com and follow UFC at Facebook.com/UFC and @UFC on X, Snapchat, Instagram, and TikTok.
*Conditions, limitations and exclusions apply. See tos.ea.com/legalapp/eaplay/US/en/PC/ for details.
TORONTO, June 22, 2026 (GLOBE NEWSWIRE) -- Environics Analytics (EA) today announced that Andrew Tziatis will join the organization as Vice President, Account Management on June 22. He will take on a leadership role within EA’s new Media Activation and Data Collaboration Services team, supporting clients as they connect data to more effective marketing outcomes.
Andrew Tziatis brings extensive agency experience from WPP Media and has been a valued partner to EA for many years. His deep understanding of the agency landscape and client needs will help strengthen EA’s ability to support organizations as they activate data, advance collaboration strategies and measure outcomes.
“We’re delighted that Andrew’s joining us. His perspective and experience make him a strong addition to our team,” said David Phillips, Chief Media & Activation Officer at EA. “He understands both the opportunities and the challenges our clients face and will help us continue to deliver measurable value.”
About Environics Analytics
Environics Analytics (EA) is the premier marketing, information, and analytical services company in Canada, helping thousands of customers across every industry sector turn data and analytics into strategy, insights and results. Established in 2003, we specialize in developing and using best-in-class data, analytics expertise, and purpose-built software (including our software-as-a-service platform, ENVISION) to address key challenges in areas such as consumer profiling and segmentation, multichannel media planning and execution, trade area analysis, merchandising and fundraising strategies, government services planning and site location decision-making. Environics Analytics is also the exclusive provider of LiveRamp technology and services in Canada, helping organizations with a variety of data collaboration and outcome measurement use cases. Environics Analytics is ISO 31700 Privacy-By-Design certified and is an affiliate of Bell Canada.
Contact: David Phillips
Chief Media and Activation Officer, Environics Analytics
DUBAI, United Arab Emirates, June 24, 2026 (GLOBE NEWSWIRE) -- Upcomers, a proprietary trading evaluation provider operating across more than 170 countries, has enabled Expert Advisor (EA) and automation tool support across all five of its trading platforms: MetaTrader 5, cTrader, TradeLocker, Match-Trader, and Bybit.
Effective May 26, 2026, participants in all Upcomers programs, including evaluation and instant access accounts, may use Expert Advisors, trade managers, risk management utilities, and other automation tools in their simulated trading. Permitted tools include custom and third-party Expert Advisors, trading bots, and execution utilities, provided they meet Upcomers' uniqueness and compliance requirements. Full details are published in the Upcomers Help Center.
Automated strategies follow the same trading rules as manual trading, including limits on certain high-frequency and arbitrage-based practices, set out in the firm's prohibited strategies guide.
“60-80% of US equity volume is already algorithmic. Automation has become the norm across modern markets, not the exception. Forcing traders to operate like it is 2015 doesn't reflect how serious traders actually work today. If you have a real edge, you should be able to execute it manually or automatically. Same rules. Same opportunity. That is why we enabled Expert Advisors and automation across all our platforms,” said Jakub Zeliska, CEO of Upcomers.
About Upcomers
Upcomers is a proprietary trading evaluation services provider offering simulated environments for evaluating trader skill and risk management. Since launching in May 2024, it has grown to support over 65,000 traders across more than 170 countries, distributing over $6 million in trader payouts to date.
Upcomers' programs are operated through Royal Flow - FZCO, a technology and education company registered in the United Arab Emirates (license number 35886, located at Building A1 IFZA Business Park, Dubai Silicon Oasis), and Upcomers Ltd., a legal entity registered in Saint Lucia (registration number 2025-00579). Payment processing is handled by UPCOMERS LTD, a Cyprus-registered entity (registration number HE 490773).
Important Disclaimer
All accounts provided through Upcomers programs operate exclusively in a simulated environment. Royal Flow - FZCO does not function as a broker, does not accept deposits, and does not facilitate live trading on financial markets. Participants do not deposit capital for investment purposes, nor do they risk their own funds. Program fees provide access to evaluation and educational services. Past performance, whether actual or hypothetical, is not indicative of future results. The evaluation process is challenging, and success rates vary based on individual performance.
Please consult a registered investment advisor before making any investment. The news site hosting this press release is not associated with Upcomers, Royal Flow - FZCO, or its affiliates. It is merely publishing a press release announcement submitted by a company, without any stated or implied endorsement of the product or service. This is not a solicitation.
by Kurt Schlosser on Jun 22, 2026 at 9:37 amJune 22, 2026 at 9:57 am
Sam Altman at OpenAI DevDay in San Francisco in 2023. (GeekWire File Photo / Todd Bishop) Amazon’s latest film drama isn’t a movie that it’s producing or streaming, but rather the situation surrounding a project it has dropped.
Amazon MGM Studios has backed away from “Artificial,” a nearly finished film about OpenAI CEO Sam Altman. The studio said last week that the film would “be better served if it were released by a different studio,” according to reports in Puck, Variety, and elsewhere.
The film, directed by Luca Guadagnino, stars Andrew Garfield as Altman and focuses on the brief period when Altman was fired from his position at OpenAI in 2023 and then rehired, according to Variety. The film has been referred to as “‘The Social Network,’ but for the AI era,” in a nod to the 2010 film about Facebook.
The New York Times reported that Amazon MGM had spent around $40 million on the project and had tested it in four markets. The decision to drop the film, planned for a 2027 release, “shocked the filmmakers,” the Times said.
Amazon announced a $50 billion investment and strategic partnership with OpenAI in February. The ChatGPT maker and Amazon Web Services deepened their technical ties, expanding an existing $38 billion multi-year agreement by $100 billion over eight years, with OpenAI planning to run more of its AI workloads on AWS.
Amazon said it is “working closely with the filmmaking team to find the film a new home.” The Hollywood Reporter said Netflix and Focus Features have both passed on “Artificial.”
Puck, which first reported the news, said the finished film struck Mike Hopkins, the head of Prime Video and Amazon MGM Studios, as darker in tone than the script Amazon had originally bought, and that Hopkins made the decision to drop it after watching a cut. Amazon’s public statement gave no reason.
Guadagnino, who directed the 2017 Oscar winner “Call Me by Your Name,” previously worked with Amazon MGM on “After the Hunt” and “Challengers.”
“We have the utmost respect and admiration for Luca Guadagnino as an award-winning filmmaker — not to mention a longstanding relationship that we hope to continue,” an Amazon spokesperson said in a statement.
Other “Artificial” cast members include Monica Barbaro as former OpenAI CTO Mira Murati, Yura Borisov as former OpenAI chief scientist Ilya Sutskever and Ike Barinholtz as Elon Musk.
, /PRNewswire/ -- MGM Resorts International (NYSE: MGM) and BetMGM today announced the renewal of their partnerships with Major League Baseball (MLB). This extends a historic relationship that began in 2018 with MGM Resorts and BetMGM becoming MLB's first Official Gaming and Sports Betting Partners.
Under the multi–year agreements, MGM Resorts also continues as MLB's exclusive Integrated Resort & Casino Partner, delivering world-class experiences to fans across the company's destinations. This includes the continued development and growth of MLB Awards Week in Las Vegas and other MLB events geared to marketing and promoting baseball stars.
"As Major League Baseball continues to evolve, we're pleased to extend a partnership that aligns with our long–term vision for global sports and entertainment," said Lance Evans, Senior Vice President of Sports & Sponsorships, MGM Resorts International. "From Las Vegas and throughout the world, we're focused on providing premium experiences that connect sports with hospitality."
BetMGM will continue to market its brand and sports wagering offerings across MLB platforms, including MLB Network, MLB.com and the league's digital portfolio, reaching fans in the U.S. and Canada. BetMGM will also maintain sponsorship integration across MLB content on Apple TV and continue to offer and develop co–branded MLB–themed casino games on BetMGM Casino, its award–winning digital gaming platform.
Matt Prevost, Chief Revenue Officer, BetMGM, said, "Major League Baseball offers one of the most engaging, data–rich experiences in sports, and this renewal underscores our shared commitment to innovation, integrity, and responsibility. Together, we're enhancing how fans experience the game, from defining moments on the field to legendary experiences at marquee events like MLB All–Star Week."
As MGM Resorts and BetMGM continue to expand into new markets and introduce new features, responsible gaming remains a key focus. The companies are proud to provide resources to help guests and customers play responsibly including GameSense, an industry-leading program, developed and licensed to MGM Resorts by the British Columbia Lottery Corporation. Through the integration within BetMGM's mobile and desktop platforms, customers can receive the same GameSense experience they have grown to rely on at MGM Resorts properties nationwide. This complements BetMGM's existing responsible gambling tools which serve to provide customers with an entertaining and safe digital experience. BetMGM also enforces a comprehensive anti–athlete harassment policy to support sportsmanship and protect the integrity of the game.
Uzma Rawn Dowler, MLB Chief Marketing Officer & Senior Vice President, Global Corporate Partnerships, said, "MGM Resorts and BetMGM have been great partners to Baseball for nearly a decade. We're excited to continue our relationship and together help create more unique experiences for our fans."
Additionally, MGM Resorts and BetMGM maintain partnerships and relationships with a variety of MLB teams including the Boston Red Sox, Cincinnati Reds, Detroit Tigers, Houston Astros, Los Angeles Dodgers, New York Yankees, Philadelphia Phillies, Pittsburgh Pirates, and Washington Nationals.
About MGM Resorts International
MGM Resorts International (NYSE: MGM) is an S&P 500® global entertainment company with national and international locations featuring best-in-class hotels and casinos, state-of-the-art meetings and conference spaces, incredible live and theatrical entertainment experiences, and an extensive array of restaurant, nightlife and retail offerings. MGM Resorts creates immersive, iconic experiences through its suite of Las Vegas-inspired brands. The MGM Resorts portfolio encompasses 31 unique hotel and gaming destinations globally, including some of the most recognizable resort brands in the industry. The Company's 50/50 venture, BetMGM, LLC, offers U.S. sports betting and online gaming through market-leading brands, including BetMGM and partypoker, and the Company's subsidiary LeoVegas AB offers sports betting and online gaming through market-leading brands in several jurisdictions throughout Europe. The Company is currently pursuing targeted expansion in Asia through the integrated resort opportunity in Japan. Through its "Focused on What Matters: Embracing Humanity and Protecting the Planet" philosophy, MGM Resorts commits to creating a more sustainable future, while striving to make a bigger difference in the lives of its employees, guests, and in the communities where it operates. The global employees of MGM Resorts are proud of their company for being recognized as one of FORTUNE® Magazine's World's Most Admired Companies®.
About BetMGM
BetMGM is a market-leading sports betting and gaming entertainment company, pioneering the online gaming industry. Born out of a partnership between MGM Resorts International (NYSE: MGM) and Entain Plc (LSE: ENT), BetMGM has exclusive access to all of MGM's U.S. land-based and online sports betting, major tournament poker, and online gaming businesses. Utilizing Entain's U.S.-licensed, state-of-the-art technology, BetMGM offers sports betting and online gaming via market-leading brands including BetMGM, Borgata Casino, Party Casino and Party Poker. Founded in 2018, BetMGM is headquartered in New Jersey. For more information, visit https://www.betmgm.com/.
About Major League Baseball
Major League Baseball (MLB) is the most historic professional sports league in the United States and consists of 30 member clubs in the U.S. and Canada, representing the highest level of professional baseball. Led by Commissioner Robert D. Manfred, Jr., MLB has achieved three straight years of total attendance gains for the first time in 18 years and remains the best-attended sports league in the world. Since 2023, historic rule changes have improved the quality of play on the field, emphasizing speed and athleticism at a better pace. In 2025, MLB had its third straight season clocking in with an average game time of 2:40 or below for the first time in 40 years. Viewership of MLB games nationally, locally, on MLB.TV and in Canada and Japan all increased over last year, with most platforms achieving double-digit percentage increases. Game Seven of the thrilling 2025 World Series presented by Capital One averaged 51.0 million viewers combined across the United States, Canada, and Japan, making the 11-inning contest the most-watched MLB game in 34 years, dating back to Game Seven of the 1991 World Series. MLB.TV set another consumption record this season with 19.4 billion minutes watched, an increase of +34% over last year. The MLB App registered its most-trafficked season ever with daily traffic increasing by +18% over 2024. As the league expanded its marketing efforts and promotion of star players like reigning Most Valuable Players Shohei Ohtani and Aaron Judge, MLB has significantly increased its younger fan base as evidenced through viewership, social media, ticket purchasing, and participation metrics. Through its MLB Together social responsibility efforts, MLB remains committed to making a positive impact in the communities of the U.S., Canada and throughout the world. With the continued success of MLB Network, MLB digital platforms, international events, and local media production and distribution, MLB continues to find innovative ways for its fans to enjoy America's National Pastime and a truly global game. To learn more about MLB, please visit mlb.com.
About British Columbia Lottery Corporation
BCLC is a social purpose company based in British Columbia, Canada that is committed to delivering win-wins for the greater good while providing lottery, casino and sports gambling entertainment in a way that serves the best interests of its players, the province and society. Last year, BCLC generated more than $1.3 billion in net income to benefit provincial and community programs, including healthcare, education and charities across British Columbia, Canada.
Forward-Looking Statements
Statements in this release that are not historical facts are forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, and involve risks and/or uncertainties, including those described in MGM Resorts' public filings with the Securities and Exchange Commission. Forward-looking statements can be identified by the use of forward-looking terminology such as "believes," "expects," "could," "may," "will," "should," "seeks," "likely," "intends," "plans," "pro forma," "projects," "estimates" or "anticipates" or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. MGM Resorts and BetMGM have based forward-looking statements on management's current expectations and assumptions and not on historical facts. Examples of these statements include, but are not limited to, MGM Resorts and BetMGM's expectations regarding the partnership with Major League Baseball. These forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include the risk that the sweepstakes or related prizes are not available in the manner described herein, risks related to the effects of economic conditions and market conditions in the markets in which MGM Resorts and BetMGM operate and competition with other destination travel locations throughout the United States and the world, the design, timing and costs of expansion projects, risks relating to international operations, permits, licenses, financings, approvals and other contingencies in connection with growth in new or existing jurisdictions and additional risks and uncertainties described in MGM Resorts' Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports). In providing forward-looking statements, neither MGM Resorts nor BetMGM is undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If MGM Resorts or BetMGM update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements
Media Contacts
Marc Jacobson
MGM Resorts
[email protected]
Chevron (CVX - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this oil company have returned -9.3%, compared to the Zacks S&P 500 composite's +2% change. During this period, the Zacks Oil and Gas - Integrated - International industry, which Chevron falls in, has lost 13.1%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Chevron is expected to post earnings of $6.23 per share, indicating a change of +252% from the year-ago quarter. The Zacks Consensus Estimate has changed +4% over the last 30 days.
The consensus earnings estimate of $15.88 for the current fiscal year indicates a year-over-year change of +117.8%. This estimate has changed +2.9% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $13.1 indicates a change of -17.5% from what Chevron is expected to report a year ago. Over the past month, the estimate has changed +0.1%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Chevron is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Chevron, the consensus sales estimate for the current quarter of $58.23 billion indicates a year-over-year change of +29.9%. For the current and next fiscal years, $221.76 billion and $208.73 billion estimates indicate +17.3% and -5.9% changes, respectively.
Last Reported Results and Surprise HistoryChevron reported revenues of $48.61 billion in the last reported quarter, representing a year-over-year change of +2.1%. EPS of $1.41 for the same period compares with $2.18 a year ago.
Compared to the Zacks Consensus Estimate of $47.37 billion, the reported revenues represent a surprise of +2.6%. The EPS surprise was +53.26%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates just once over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Chevron is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Chevron. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Shares of Chevron Corporation CVX traded lower after the oil major announced a long-term agreement with Microsoft Corporation to supply electricity to a massive artificial intelligence data center in West Texas.
Under the agreement, Chevron's unit, Energy Forge One LLC, will build a 2.67-gigawatt natural gas power plant under Project Kilby, a development expected to deliver electricity directly to a Microsoft-operated data center under a 20-year contract.
The first power deliveries are expected in 2028, while a final investment decision is anticipated by the end of 2026.
Chevron is developing Project Kilby in partnership with Joulent, an energy company launched by investment firm Engine No. 1.
The project will be located on more than 2,000 acres in Reeves County in the heart of the Permian Basin and will be powered by natural gas produced from Chevron's nearby operations.
Most of the electricity will come from large turbines supplied by GE Vernova, with additional capacity from Solar Turbines, a subsidiary of Caterpillar Inc.
"Our agreement with Microsoft through Project Kilby represents Chevron's unique ability to deliver power to AI customers with certainty, speed and at a competitive cost, leveraging Permian natural gas supply, infrastructure and our proven execution capabilities," said Jeff Gustavson, president of Chevron's New Energies unit.
The project is expected to create about 2,000 jobs and generate more than $10 billion in state and local tax revenue.
The facility will use non-potable, brackish groundwater instead of freshwater and include emissions control technology.
The project highlights a growing industry trend of data center operators securing dedicated power generation as electricity demand from AI infrastructure strains existing grids.
AI training requires massive amounts of electricity delivered continuously to a single site, while grid upgrades and transmission projects often take years to complete.
As a result, developers are increasingly adopting a "Bring Your Own Power" strategy to accelerate access to electricity.
Project Kilby will initially operate with its own on-site power plant and connect to the Texas grid at a later stage.
Excess generation is expected to be sold into the state's power market.
"The ability to have a firm power resource for the Texas grid is something I think everyone would welcome," said Chris James, founder and chief executive of Engine No. 1 and Joulent.
According to data provider Cleanview, developers of about one-quarter of all planned data center capacity intend to build on-site power generation, representing around 90 gigawatts of combined capacity.
The project also strengthens Chevron's position in the emerging market for AI-related power infrastructure.
Rival energy companies are pursuing similar opportunities, including Exxon Mobil's partnership with NextEra Energy to develop a gas-fired power plant that could serve data center customers.
"AI and cloud are advancing at a pace that requires a new level of coordination between energy and infrastructure," said Noelle Walsh, Microsoft's president of cloud operations and innovation.
Project Kilby is expected to deliver mid-teen returns and generate cash flows that are independent of oil and gas price cycles.
The site could eventually incorporate solar generation and large-scale battery storage to enhance reliability as development continues into the 2030s.
"If we're going to build the amount of compute that we need, this is going to have to be a very large part of the solution," James said.
He added: "We think the Permian in particular is a place where we're going to see growth for a very long time. This should be the Northern Virginia kind of equivalent for AI compute."
Key Takeaways Chevron's Gulf assets, Hess acquisition and project ramp-ups support long-term growth.CVX projects 117.8% earnings growth in 2026, versus BP's expected 86.5% increase.BP trades at 0.44X forward price-to-sales, below Chevron's 1.6X valuation. Chevron Corporation (CVX - Free Report) and BP p.l.c. (BP - Free Report) are among the most influential players in the global energy industry, and their rivalry is especially evident in the Gulf of America — one of the world's most productive offshore oil regions. Both companies have built extensive deepwater portfolios, leveraging advanced technologies, large-scale infrastructure and decades of operational expertise to unlock high-margin oil and gas resources. As the Gulf continues to play a vital role in the U.S. energy supply and long-term energy security, Chevron and BP are investing heavily to expand production, enhance efficiency and extend the life of key assets. While they often collaborate on major projects, they also compete fiercely for new discoveries and market leadership. This comparison examines how the two energy giants stack up in terms of asset strength, growth prospects, operational performance and investment appeal in the Gulf of America.
Let's take a closer look at both companies to see which might be a better investment right now.
The Case for Chevron StockChevron’s Gulf of America (GoA) portfolio is a major strength and a cornerstone of its upstream growth strategy. Following the Hess acquisition, Chevron became the largest acreage holder in the region, significantly expanding its resource base and production footprint. Gulf of America production averaged about 235,000 barrels of oil equivalent per day in 2025, with additional volumes contributed by acquired Hess assets. The company benefits from a diversified portfolio of operated and non-operated deepwater assets, including Anchor, Ballymore, Tahiti, Stampede, Whale and Perdido. These long-life fields provide high-margin production, strong cash generation and decades of reserve visibility, reinforcing Chevron’s position as one of the leading deepwater operators globally.
A key differentiator for the company lies in the fact that several of its projects either achieved first oil in 2025 or are ramping toward full production, including Ballymore, Whale, Jack/St. Malo Stage 5 and the Black Pearl development at Stampede. Chevron highlights the GoA project ramp-ups as a key contributor to its projected free cash flow growth through 2026. The company is also advancing exploration activities, including the Far South discovery and newly acquired exploration blocks from the 2025 lease sale. These developments provide opportunities to increase production, enhance recovery from existing infrastructure and unlock additional high-return resources over the long term.
Despite these positives, Chevron’s deepwater projects require significant capital investment, advanced technology and flawless execution, making them vulnerable to cost inflation, supply-chain constraints and project delays. Production growth is also heavily influenced by commodity price volatility, which can affect project economics and investment decisions. In addition, offshore operations face increasing environmental scrutiny, permitting requirements and potential regulatory changes that could impact future developments.
However, Chevron’s scale, technical expertise and diversified Gulf asset base position it well to capitalize on long-term offshore opportunities. The combination of long-life fields, ongoing project ramp-ups and exploration potential makes the GoA a critical driver of future production growth and cash flow, while operational and regulatory risks remain key factors to monitor.
The Case for BP StockBP’s Gulf of America portfolio remains one of the company’s most important strengths. The region continues to deliver reliable, high-margin production supported by world-class offshore assets and strong operational performance. In the first quarter of 2026, BP reported upstream output of 2.3 million barrels of oil equivalent per day supported by higher production from the GOA and strong performance in bpx Energy, despite disruptions elsewhere in its portfolio. Additionally, projects such as Argos and the Argos Southwest Extension, along with recent discoveries including the Far South prospect offshore Louisiana, strengthen BP’s position in one of the most prolific oil-producing regions globally.
Looking ahead, the Gulf of America offers significant growth opportunities for BP. The company’s strategy emphasizes growing upstream production and cash flow through disciplined investment, and the Gulf remains central to that objective. Recent exploration successes in the region provide opportunities to bring new resources online at competitive costs. As global energy demand remains robust and offshore projects continue to generate attractive returns, BP is well-positioned to leverage the Gulf of America as a key driver of long-term cash flow growth and shareholder value.
Despite these positives, offshore developments in GoA require substantial capital investment and face execution risks related to drilling, construction, and operational performance. In addition, the region remains vulnerable to hurricanes and severe weather events that can disrupt production and increase costs.
Another notable challenge is the continuing legacy of the Gulf of America oil spill. BP still faces settlement-related obligations, and future payment requirements remain a factor in financial planning. At the same time, increasing environmental scrutiny, evolving regulations and the broader energy transition could complicate future development plans. Balancing production growth with financial discipline and sustainability expectations will be critical for maximizing the long-term value of BP’s Gulf of America assets.
Price PerformanceIn the past six months, shares of CVX and BP have gained 15.9% and 14.5%, respectively.
Image Source: Zacks Investment Research
Valuation ComparisonFrom a valuation perspective — in terms of forward price-to-sales ratio — BP is trading at a discount of 0.44X compared with Chevron’s 1.6X.
Image Source: Zacks Investment Research
Earnings Estimate TrendAccording to the Zacks Consensus Estimate, CVX’s earnings are set to rise 117.8% in 2026.
Image Source: Zacks Investment Research
The same for BP’s 2026 EPS indicates a year-over-year increase of 86.5%.
Image Source: Zacks Investment Research
ConclusionBoth Chevron and BP maintain strong positions in the Gulf of America, supported by high-quality deepwater assets, ongoing project developments and attractive long-term production opportunities, justifying Zacks Rank #3 (Hold) for both the companies.
BP offers investors a more discounted valuation and continues to benefit from solid operational performance and exploration success in the region. However, its investment case remains tempered by legacy Gulf spill-related obligations, weather-related risks and regulatory commitments.
Chevron appears better positioned overall due to its larger Gulf footprint following the Hess acquisition, industry-leading acreage position, diversified portfolio of long-life assets and multiple projects that are already ramping up production. The company also stands to benefit from stronger projected earnings growth, expanding exploration opportunities and increasing free cash flow contributions from key Gulf developments. While both companies face similar offshore execution and regulatory challenges. As a result, Chevron emerges as the more compelling investment choice for investors seeking sustained production growth and cash flow strength.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
(We are reissuing this article to correct a mistake. The original article, issued on June 22, 2026, should no longer be relied upon.)
