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Research Daily

Friday, November 17, 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), Dominion Energy (D) and Petrobras (PBR). 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 outperformed the Zacks Networking industry on a year to date basis, gaining +18.7% vs. +17.2%. The company’s results have been negatively impacted by weak switching and router revenues. Top-line continues to hurt by intense competition from several smaller players and challenges in the emerging markets.

However, acquisitions contributed strongly to top-line growth. Management provided positive top-line guidance for second-quarter fiscal 2018 based on order strength and improving traction of the subscription-based model. The Zacks analyst thinks the company’s expanding footprint in the rapidly growing security market presents significant growth opportunity.

Additionally, partnerships with Telenor, Apple, IBM and Microsoft are positive, in our view. The company's recently announced collaboration with Google Cloud to offer hybrid cloud solution is a key catalyst. The planned acquisition of Broadsoft will boost company's recurring revenue base.

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

Shares of Dominion Energy have gained +4.1% over the last three months, outperforming the Zacks Electric Power industry, which has increased 2.9% over the same period. The company reported mixed results in the third quarter, with earnings topping expectations but total revenues lagged the same. Dominion Energy is benefiting from its regulated growth projects and synergies from Questar acquisition. Dominion’s Greensville County Power Station and Cove Point Liquefaction project are proceeding on time and budget and are likely to boost the company’s performance over the long term.

The company’s expansion of electric transmission, natural gas facilities and midstream assets are strong positives. However, Dominion Energy’s near term prospects and earnings will be adversely impacted due to lower solar investment tax credit, higher PJM electric capacity expenses and lower earnings from Cove Point due to the roll off of one of its import contracts.

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

Petrobras' shares have outperformed the Zacks Emerging Markets Integrated Oil industry over the last one year, gaining +14.3% vs. +9.1%. Petrobras is poised to benefit from Brazil’s economic growth and huge pre-salt oil reserves. The Zacks analyst likes the company’s strong pipeline of development projects and impressive exploration successes.

Petrobras’ focus on cost improvement measures and divestment of non-core assets will help it revive its financial health. However, though the company is making successful efforts to trim its massive debt loads, it still has a leverage of 53% which is cause for concern.

Petrobras ADRs continue to struggle, reflecting lingering issues pertaining to the money-laundering scandal that has scarred its credit metrics. Therefore, we take cautious stance on the prospects of the stock.

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

Other noteworthy reports we are featuring today include Chevron (CVX), Progressive (PGR) and KLA-Tencor (KLAC).

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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>>>

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