Top Research Reports for Cisco, Procter & Gamble & Citigroup

Wednesday, October 3, 2018

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), Procter & Gamble (PG) and Citigroup (C). 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 >>>

Buy-ranked Cisco's shares have outperformed the Zacks Computer Networking industry over the past year, gaining +46.6% vs. +42.9%. The Zacks analyst thinks Cisco is benefitting from expanding footprint in the rapidly growing security market which represents a significant growth opportunity.

Strong contributions from acquisitions, security, Infrastructure Platforms and applications remains a positive. Strengthening collaboration portfolio which now includes Webex Teams and AI-based Accompany bodes well. Partnerships with Telenor, Apple, IBM, Microsoft and Google Cloud are positive. Divestiture of a portion of Cisco’s NDS video assets is likely to mitigate the sluggishness witnessed in other product segment.

Further, Duo Security acquisition should help the company expand its IT and data security businesses, which will only become more vital going forward. However, weakness in switching and routing is a headwind. Ongoing transition to subscription-based model will continue to hurt the top line.

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

Shares of Buy-ranked Procter & Gamble have gained +8.2% over the past three months, outperforming the Zacks Soap and Cleaning Materials industry, which gained +4.6% over the same period. The Zacks analyst thinks that this increase was driven by an impressive earnings surprise history, which continued in fourth-quarter fiscal 2018, marking its 13th consecutive beat.

The company’s focus on product improvement, packaging and marketing initiatives, and productivity cost-savings plan bodes well. It is benefiting from higher demand for skincare products, along with fabric and home care products.

However, the company is witnessing strained margins owing to increased commodity and shipping costs, adverse currency, higher business investments and aggressive pricing from private-label products amid intense competition. Moreover, sales remain muted due to weak demand and lower prices.

While the company expects recently announced price increases to help rebound sales and margins, its likely impact on demand and consumption is a worry. Also, softness in the grooming and baby care businesses remains a concern.

(You can read the full research report on Procter & Gamble here >>>).

Citigroup’s shares have outperformed the Zacks Major Regional Banks industry over the past six months (+3.5% vs. -0.9%). Further, the company possesses an impressive earnings surprise history, beating expectations in all the trailing four quarters.

The Zacks analyst thinks the company’s restructuring and streamlining efforts, strategic investments in core business, lower tax rate and expense management will likely support profitability. The recent capital plan approval reflects strong capital position.

Yet several issues, including litigation burden, are cause for concern. Nevertheless, with rising rates, margin pressure seems to be easing. Notably, the bank expects third-quarter 2018 fixed income and equity trading revenues likely to be flat to slightly higher on a year-over-year basis.

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

Other noteworthy reports we are featuring today include IBM (IBM), Qualcomm (QCOM) and General Electric (GE).

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Mark Vickery
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>>>

Today's Must Read

Cisco (CSCO) Rides on Security Products & Strategic Deals

P&G's (PG) Productivity & Cost Savings Plan Aids Margins

Focus on Core Operations Aid Citigroup (C), Legal Woes Linger

Featured Reports

Qualcomm (QCOM) Rides on Novel Products to Deter Competition

Per the Zacks analyst, despite soft industry conditions and stiff competition, Qualcomm aims to retain leadership in the chipset market with technological achievements and innovative product launches.

Reshuffling Moves to Drive GE's Growth, Power Business Ails

Per the Zacks analyst, portfolio-restructuring moves will likely prove beneficial to General Electric's growth. However, the lackluster Power segment's business remains a drag.

Cost Saving Initiatives Aid Toyota (TM), Car Recalls a Woe

Per the Zacks analyst, Toyota's plan of shifting production to new cost-saving platforms by 2020 will help it to cut costs by 20%. However, frequent vehicle recalls are adding to expenses.

BP plc (BP) Banks on Upstream Projects, Free Cashflow Rises

A strong portfolio of upstream projects will help BP boost oil and gas production. Moreover, rising free cashflow reflects healthy operations, per the Zacks analyst.

Strategic Acquisitions Aid BlackRock (BLK), High Costs a Woe

Per the Zacks analyst, BlackRock's focus on inorganic growth routes along with efforts to strengthen the iShares and ETF operations are favorable. However, escalating costs is an unfavorable factor.

Ford (F) Rides on Fitness Initiatives Amid Recall Blues

Per the Zacks analyst, Ford's $11.5 billion fitness initiatives have opened up cost and efficiency opportunities.

Focus on Buyouts to Continue Driving Conagra's (CAG) Sales

Per the Zacks analyst, Conagra is set to keep gaining from acquisitions.

New Upgrades

Trading Focus, Higher Rates Support Schwab (SCHW) Revenues

Per the Zacks analyst, Schwab's focus on improving trading revenues by taking several measures and higher interest rates aid revenues. Enhanced capital deployment plan reflects strong balance sheet.

Solid Policies in Force, Retention Aids Progressive (PGR)

Per the Zacks analyst, Progressive is poised for growth on solid policies in force and sturdy retention ratio driving premiums higher.

Dividends, Buybacks & Unit Revenues Buoy Southwest (LUV)

The Zacks analyst likes the company's efforts to reward shareholders and modernize its fleet. Unit revenue growth is an added positive.

New Downgrades

Ongoing Business Transition to Cloud & Seasonality Hurts IBM

Per the Zacks analyst, IBM is having a tough time, given the ongoing time-consuming business model transition to cloud. Also, stiff competition in most of the markets is a major concern.

Allergan's (AGN) Blockbuster Drugs Face Generic Competition

Allergan faces loss of exclusivity for key drugs like Namenda XR and Restasis, which worries the Zacks analyst. The first generic version of Namenda is out while that of Restasis may come out soon

Elevated Expenses and Stiff Competition Hurt Moody's (MCO)

Per the Zacks analyst, Moody's efforts to grow inorganically are likely to keep costs high, thus hurting bottom line growth. Also, stiff competition across the credit rating industry remains a woe.

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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
 
Procter & Gamble Company (The) (PG) : Free Stock Analysis Report
 
International Business Machines Corporation (IBM) : Free Stock Analysis Report
 
General Electric Company (GE) : Free Stock Analysis Report
 
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
 
Citigroup Inc. (C) : Free Stock Analysis Report
 
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