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Top Stock Reports for Cisco, Enterprise Products Partners & Prudential

Friday, August 18, 2017

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Cisco (CSCO), Enterprise Products Partners (EPD) and Prudential (PRU). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Cisco’s shares have underperformed the Zacks Technology sector year to date, gaining +2.7% vs. +15.9%. Cisco’s fourth-quarter fiscal 2017 results were negatively impacted by lackluster switching and router revenues. The decline in top-line reflects intensifying competition from several smaller players, slowing order growth from service providers and challenges in the emerging markets. The time consuming transition to subscription-based business model will continue to hurt top line growth at least in the near term.

Nevertheless, the Zacks analyst thinks that the company’s expanding footprint in the rapidly growing security market presents significant growth opportunity. Further, the company’s focus on driving cost improvement, operational efficiencies and productivity will help in margin expansion. Additionally, extended partnerships with Apple, IBM and Microsoft are other positives.

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

Enterprise Products Partners has declined -6.8% over the last one year, even as the Zacks Oil Pipeline Industry declined by -16.4%. Enterprise Products’ extensive pipeline network of pipeline is connected to every major U.S. shale play and provides services to producers and users of commodities by transporting natural gas liquid (NGL), natural gas, crude oil and refined products. Cash distribution has increased for 52 successive quarters, reflecting stable fee-based cash flow from diversified midstream assets.

The Zacks analyst likes this trend, which is slated to continue as the partnership has a backlog of almost $9 billion fee-based growth projects. Despite these positives, Enterprise Products’ second-quarter 2017 results were lower than expected. Also, the partnership’s escalating debt since 2012 reflects its weak balance sheet. Moreover, over the last one year, the partnership’s price fell 7%, following the trend of the broader industry’s 16% decline over the same time frame.

(You can read the full research report on Enterprise Products Partners here >>>).

Prudential shares have gained +34.8% over the last year, outperforming the Zacks Multiline Insurance industry, which has gained +28.2%% over the same period. Prudential’s second-quarter earnings missed estimates. However, the quarter witnessed positive net flows, favorable equity markets in fee-based businesses, revenue increase in international businesses and overall strong margins.

The Zacks analyst likes Prudential’s high performing asset management business, international operations and deeper reach in the pension risk transfer market. Expanded international presence provides it with better organic growth opportunities than peers. Also, a strong balance sheet and efficient capital management are tailwinds. It now expects ROE between 12% and 13% in the near to intermediate-term. However, exposure to low interest rates, unfavorable currency impact and regulatory control remain headwinds.

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

Other noteworthy reports we are featuring today include Public Storage (PSA), Zoetis (ZTS) and United Continental (UAL).

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Senior Editor

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

Featured Reports

Public Storage (PSA) Gains from Buyouts, Supply Woes Remain

Per the Zacks analyst, Public Storage is poised to gain from its high brand value, strategic acquisitions and robust presence in key cities.

Zoetis' (ZTS) Companion Animal Portfolio Driving Growth

Per the Zacks analyst, companion animal products such as Simparica, Apoquel and Cytopoint should continue to drive growth at Zoetis and offset the impact of decline in swine sales due to competition.

Devon (DVN) Gains From E&P Investment and Cost Savings

The Zacks analyst believes Devon's systematic E&P investment continues to increase its oil production and cost savings initiative is expanding its margins.

Magellan's (MMP) Distribution Coverage Healthy, Debt a Woe

While appreciating Magellan Midstream's healthy distribution coverage and consistently growing payouts, the Zacks analyst remains concerned over the partnership's high debt-to-equity ratio.

Mid-America (MAA) Gains from Scale Despite Supply Concerns

Per the Zacks analyst, Mid-America Apartment Communities' enhanced scale through the Post Properties merger and ample liquidity augurs well.

Underwriting Results Aid CNA Financial (CNA)

Per the Zacks analyst, solid underwriting results, due to improving combined ratio, continue to boost earnings for CNA Financial, thereby resulting in overall growth.

Nasdaq (NDAQ) Gains from Non-transaction Revenues, Costs Worrying

Per the Zacks analyst, Nasdaq's organic growth has been aided by its strategy of accelerating its non-transaction revenue base.

New Upgrades

Papa John's (PZZA) Rides on Expansion & Digital Initiatives

Per the Zacks analyst, Papa John's large scale expansion plans along with increased focus on digital innovation to attract new customers should drive growth.

Balanced Growth Focus Drives CACI International (CACI)

Per the Zacks analyst, robust business model with balanced organic and inorganic growth focus remain tailwinds for CACI International. Management also reiterated 2018 view on healthy growth dynamics.

Gap (GPS) to Gain from Old Navy Strength & Omnichannel Plans

Per the Zacks analyst, Gap's solid focus on improving consumers' experience by enhancing digital and mobile offerings bodes well. Also, continued strength in Old Navy remains a major growth driver.

New Downgrades

SABESP (SBS) Face Risks from Higher Costs & Huge Debts

Per the Zacks analyst, rising costs and debt levels, adverse currency translation impacts, and governmental interference may prove to be potential headwinds for SABESP in the quarters ahead.

United Continental (UAL) Stung by High Labor Costs & Debt

The surge in labor costs following the multiple labor deals inked by the company is hurting the bottom line.The company's high debt levels also concern the Zacks analyst.

Spectrum's (SPPI) Product Sales Hurt by Generic Pressure

Per the Zacks analyst, Spectrum's sequential decline in sales in most products since last few quarters due to generic threats and stiff competition may hurt bottom-line in near term.

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Zoetis Inc. (ZTS): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
Public Storage (PSA): Free Stock Analysis Report
Prudential Financial, Inc. (PRU): Free Stock Analysis Report
Enterprise Products Partners L.P. (EPD): Free Stock Analysis Report
Cisco Systems, Inc. (CSCO): Free Stock Analysis Report
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