The year so far has been harsh for the stock market due to headwinds like surging inflation, a hawkish Fed, and the war in Ukraine. Rising concerns over a…
slowing economy have added to the pressure lately.
The U.S. GDP fell at a 0.9% annualized rate following a 1.6% decline during the first quarter. With the economy shrinking for the second straight quarter, the stock market swings will likely amplify. CEO of BlackRock Larry Fink cited that the stock market is not likely to completely rebound in the second half of 2022, as inflation remains high.
Considering the volatile market conditions, investing in large-cap stocks can help hedge some of the market risks. Large-cap stocks are often considered safer and profitable opportunities for investors due to their stability amid market disruptions. The broad market reach, strong pricing power, and high liquidity help these companies survive economic troubles and generate stable cash flows.
Given this backdrop, fundamentally sound large-cap stocks AbbVie Inc. (ABBV), Broadcom Inc. (AVGO), Bristol-Myers Squibb Company (BMY), Cigna Corporation (CI), and BHP Group Limited (BHP) could be solid additions to one’s portfolio.
AbbVie Inc. (ABBV)
With a market capitalization of $267.10 billion, ABBV is engaged in developing, manufacturing, and selling pharmaceuticals globally. It offers its products in various categories: immunology, oncology, neuroscience, eye care, and women’s healthcare. The company markets its products to wholesalers, distributors, government agencies, health care facilities, and independent retailers.
On July 20, 2022, ABBV announced a strategic alliance with iSTAR Medical SA to develop and commercialize iSTAR’s MINIject device for the treatment of glaucoma. This partnership is expected to expand ABBV’s diverse eye care portfolio and provide additional treatment options for glaucoma patients.
On July 26, 2022, the European Commission approved the company’s RINVOQ (upadacitinib) for treating adults with moderate to severe ulcerative colitis who have had an inadequate response and lost response or were intolerant to either conventional therapy or a biologic agent. This approval should strengthen ABBV’s ability to treat patients with ulcerative colitis.
ABBV’s net revenues increased 4.1% year-over-year to $13.54 billion in the first quarter ended March 31, 2022. The company’s non-GAAP net earnings increased 9.3% from the year-ago value to $5.64 billion, while its operating earnings grew 15% year-over-year to $4.72 billion. ABBV’s adjusted EPS rose 9.3% from the prior-year quarter to $3.16.
Analysts expect ABBV’s EPS and revenue to increase 6.4% and 4.8% year-over-year to $3.31 and $14.64 billion, respectively, in the fiscal second quarter ended June 30, 2022. ABBV has gained 39.4% over the past nine months and 28.1% over the past year to close the last trading session at $151.15.
ABBV’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It also has an A grade for Quality and a B for Growth and Value. Also, it is ranked #10 of 171 stocks in the Medical – Pharmaceuticals industry. To see additional POWR Ratings for Momentum, Stability, and Sentiment for ABBV, click here.
Broadcom Inc. (AVGO)
AVGO designs, develops, and supplies a range of semiconductor devices focusing on complex and mixed signal complementary metal oxide semiconductor-based devices and analog III-V-based products. It operates through two segments: semiconductor solutions and infrastructure software. The company has a market capitalization of $213.74 billion.
On May 26, 2022, AVGO announced the acquisition of VMware, Inc. (VMW) for approximately $61 billion in cash and stock. This acquisition should accelerate software scale, growth opportunities for the company, and fuel revenues.
For the second quarter ended May 1, 2022, AVGO’s net revenue increased 23% year-over-year to $8.10 billion. Its adjusted EBITDA rose 29.1% year-over-year to $5.11 billion, while its non-GAAP net income came in at $4 billion, up 34.2% from its year-ago period. AVGO’s non-GAAP EPS stood at $9.07, indicating a 37% year-over-year increase.
For the fiscal third quarter (ending July 2022), AVGO’s revenue is expected to increase 24% year-over-year to $8.41 billion. Street expects its EPS to increase 37.3% year-over-year to $9.55 in the current quarter. The company surpassed the EPS estimates in each of the trailing four quarters.
Shares of AVGO have gained 11% over the past year to close the last trading session at $527.79.
AVGO has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. It has an A grade for Growth and Quality and a B for Sentiment. Within the B-rated Semiconductor & Wireless Chip industry, it is ranked #7 out of 94 stocks.
In addition to the POWR Ratings I’ve just highlighted, you can see AVGO’s ratings for Value, Momentum, and Stability here.
Bristol-Myers Squibb Company (BMY)
With a market capitalization of $159.28 billion, BMY is a biopharmaceutical company offering pharmaceutical products for treating hematology, oncology, cardiovascular, immunology, fibrotic, neuroscience, and COVID-19 diseases.
On July 22, 2022, the company received CHMP’s approval for the LAG-3-blocking antibody combination Opdualag (nivolumab and relatlimab) for treating unresectable or metastatic melanoma patients. With this approval…
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