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CHICAGO--(BUSINESS WIRE)--Zacks
Equity Research highlights Baker Hughes, Inc. (NYSE: BHI) as the Bull of
the Day and CSX Corporation (NYSE: CSX) as the Bear of the Day. In
addition, Zacks Equity Research provides analysis on TRW Automotive
Holdings (NYSE: TRW), Kinross Gold (NYSE: KGC) and Ultimate
Software Group (Nasdaq: ULTI).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all five stocks:
Bull of the Day: Baker Hughes, Inc. (NYSE: BHI)
We reiterate our Buy recommendation and EPS estimates for Baker Hughes shares
ahead of the company’s second-quarter results. Despite
the company’s relatively soft results in the last
quarter, our long-term view of the business remains favorable.
We expect strong revenue growth during the second half of 2008, powered by an
improved North American outlook and continued international expansion. Being a
premium oilfield service player, the company remains well positioned to
capitalize on the current oilfield cycle.
Bear of the Day: CSX Corporation (NYSE: CSX)
We believe the shares have been overbought and that CSX is expensive on a
fundamental basis. CSX will report second quarter results on July 15. We are
retaining our 2008 EPS estimate at $3.55, near the top of CSX guidance of
$3.40-3.60, as well as our 2009 estimate at $4.00. Improved efficiency, strong
yields, and share buybacks should offset weakening volumes from a slowing
economy and higher fuel costs.
Results of the June 25 board election will be announced on July 25, though
two activist funds claim they’ve won four seats on the
board of directors. CSX just increased the dividend 22%.
Latest Posts on the Zacks Analyst Blog:
TRW Automotive Holdings (NYSE: TRW)
TRW Automotive has excellent long-term prospects, primarily because of
the increasing emphasis being put on safety awareness by both government and
consumers. The management is re-evaluating the company's cost structure and is
keen on undertaking restructuring activities.
However, the company may be affected by constant production cuts by original
equipment manufacturers (OEM), pricing pressure, and lower production volumes in
North America. Thus, we rate the stock a Hold with a target price of $19.00.
Kinross Gold (NYSE: KGC)
Higher gold prices bode well for Kinross top-line growth. Kinross Gold Corp.
has received approval for a huge investment in the Paracatu mine expansion,
which is expected to start production in July. The various exploration and
expansion activities undertaken will enhance production levels. The Bema
acquisition will result in various synergies.
However, declining production levels at some of the existing operations and
higher mining, energy, and administrative overhead costs are likely to constrain
margin expansion. Consequently, we reiterate our Hold recommendation on shares
of KGC, with a six-month target price of $21.00.
Ultimate Software Group (Nasdaq: ULTI)
The Ultimate Software Group, Inc. is growing at a double-digit rate, and
appears to be gaining acceptance in large organizations with more than 2,500
employees. Over the long-term, the company expects to achieve its target
operating margin of 30%, up from a single-digit rate.
We believe Ultimate Software is well-positioned to take advantage of growth
in on-demand payroll systems, and the company has been executing its strategy
well. The company has been making progress in its operating metrics. The company
generated $29.1 million from operating activities during 2007 versus $15.4
million in the year-ago period. Operating cash flow grew to $10.5 million in the
first quarter of 2008 from $3.6 million in the year-ago quarter and $8.8 million
sequentially.
Get the most recent insight from Zacks Equity Research with the free Profit
from the Pros newsletter: http://at.zacks.com/?id=2649.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are
likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6
months.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from
Zacks Equity Research about the latest news and events impacting stocks and the
financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative
analysis to help investors know what stocks to buy and which to sell for the
long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded
stocks. Our analysts are organized by industry which gives them keen insights to
developments that affect company profits and stock performance. Recommendations
and target prices are six-month time horizons.
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