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Top Stock Reports for Cisco, Nike & United Parcel Service

Mark Vickery
Top Stock Reports for Cisco, Nike & United Parcel Service

Monday, March 25, 2019

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), NIKE (NKE), and United Parcel Service (UPS). 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 gained +19.7% in the past year, outperforming the Zacks Computer Networking industry's increase of +17.3%. The Zacks analyst thinks Cisco is benefiting from strength witnessed in the company’s security, Infrastructure Platforms and applications segments. Order strength and improving traction of the subscription-based model are other tailwinds.

A strengthening collaboration portfolio, which now includes Webex Teams and Accompany, bodes well. Further, buyout of Duo Security and Luxtera is expected to aid the company in expanding its IT and data center clientele. Moreover, robust adoption of company’s Wave 2 offerings, Meraki solutions, Catalyst 9000 switching platform and HyperFlex data-center solutions hold promise.

Nevertheless, weakness in routing is a headwind. Competition from Arista primarily in campus connect network switches market is likely to hurt Cisco as it holds a dominant position in that domain.

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

Shares of Nike have gained +24.8% in the past year, outperforming the Zacks Shoes and Retail Apparel industry, which gained +19.6% over the same period, driven by a robust surprise trend, stemming from the execution of Consumer Direct Offense. Nike delivered positive earnings results for over three years now, with third-quarter fiscal 2019 marking the 27th straight quarter of earnings beat. Sales surpassed estimates for the eighth straight quarter.

The Zacks analyst thinks strong progress on Consumer Direct Offense through innovation and focus on digital transformation are the key drivers. Growth at international and NIKE Direct businesses aided results in the fiscal third quarter.

However, the company provided a soft view for the fiscal fourth quarter, owing to unfavorable currency impact. Higher SG&A expenses due to increased investments are likely to remain a drag. Further, higher input costs like cotton, chemicals and labor as well as the shift in supply-chain investments from the fiscal third quarter to the fourth quarter should hurt results.

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

United Parcel Service’s shares have outperformed the Zacks Transportation - Air Freight and Cargo industry over the past year, gaining +3.5% vs. -10%. The Zacks analyst likes UPS' efforts to reward its shareholders through dividends and buybacks.

Evidently, the company rewarded its shareholders to the tune of $4.2 billion in 2018. Continuing its pro-investor approach, in February 2019, UPS increased its quarterly dividend by 5.5% to 96 cents per share. Robust free cash flow generation by UPS supports the possibility of a dividend hike moving ahead. Moreover, UPS’ growth is hugely supported by the e-commerce development. The company anticipates cross-border e-commerce volume to grow by 28% over the next three years.

However, the company's high capital expenditure is limiting bottom-line growth. Trade-war related uncertainty and high debt pose further challenges.

(You can read the full research report on United Parcel Service here >>>).

Other noteworthy reports we are featuring today include Barclays (BCS), General Mills (GIS) and WellCare Health (WCG).

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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) Gains From Security Products & Strategic Deals

Consumer Direct Offense Aids NIKE (NKE), Currency Hurts

E-Commerce, Dividends & Buybacks Aid UPS, High Capex a Woe

Featured Reports

Restructuring Efforts Aid Barclays (BCS), Legal Woes Linger

Per the Zacks analyst, Barclays' business simplifying efforts (including ring-fencing) are likely to further lower expenses.

General Mills' (GIS) Margins Likely to Gain From HMM Program

General Mills is benefiting from Holistic Margin Management, which aided margin expansion in the third quarter. Per the Zacks analyst, savings from the plan are likely to drive margins in fiscal 2019.

Health Care Products Aid Fresenius (FMS), Competition Rife

Solid prospects in Health Care Products unit is likely to give Fresenius a competitive edge. The Zacks analyst is pessimistic about cutthroat competition in the niche market of dialysis products.

Rising Revenues, Inorganic Growth Aid WellCare Health (WCG)

Per the Zacks analyst, growing revenues driven by initiatives such as the buyout of Meridian Health Plans of Michigan and Illinois plus MeridianRx have led to significant growth.

Investments, Expanding Customer Base Aid NiSource (NI)

Per the Zacks analyst, NiSource's planned $30B investments to strengthen its gas and electric infrastructure and expanding customer base will drive its performance.

Growing Client Base Aids Teladoc (TDOC), High Debt Level Ails

Per the Zacks analyst, expanded client base, due to the addition of new clients and rise in membership and visits, will drive growth.

Dividends, Buybacks & Fleet Upgrade Buoy SkyWest (SKYW)

The Zacks analysts likes the company's efforts to reward shareholders.

New Upgrades

William-Sonoma (WSM) Banks on E-Commerce Expansion For Growth

Per the Zacks analyst, continued enhancement of its e-commerce channel, optimization of supply chain and focus on product innovation are expected to drive growth.

W&T Offshore (WTI) to Ride on Strong Gulf of Mexico Presence

Per the Zacks analyst, W&T Offshore's massive oil equivalent reserves in the deepwater Gulf of Mexico will help the company boost production and enhance cash flows.

St Joe (JOE) Rides High With Income Producing Asset Expansion

Per the Zacks analyst, St. Joe's strategy to expand its portfolio of income-producing properties and a focus on cost discipline are expected to help the company ride on the growth curve.

New Downgrades

Investment Portfolio Risk, High Costs Hurt ProAssurance (PRA)

Per the Zacks analyst, declining investment portfolio affects the topline and continues to be a risk. Escalating expenses due to policy buyouts, underwriting and operating costs remain a concern.

Donaldson's (DCI) Growth Marred by Weak Gas Turbine Market

Per the Zacks analyst, Donaldson's sales will continue to be hurt by prolonged weakness in the gas turbine market. Further, constrained margins and high operating costs remain concerns.

High Costs & Debt Levels Plague J.B. Hunt (JBHT)

The company's high operating expenses due to increased driver wages makes the Zacks analyst turn bearish on the stock. Its high debt levels are also worrisome.

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WellCare Health Plans, Inc. (WCG) : Free Stock Analysis Report
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
NIKE, Inc. (NKE) : Free Stock Analysis Report
General Mills, Inc. (GIS) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Barclays PLC (BCS) : Free Stock Analysis Report
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