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Business
Zacks Bull and Bear of the Day Highlights: Time Warner Telecom, Trimeris, General Mills, Daimler and Saks, Inc.
© Business Wire 2008
2008-05-15 12:10:56 - - Zacks Equity Research highlights Time Warner Telecom (Nasdaq: TWTC) as the Bull of the Day and Trimeris, Inc. (Nasdaq: TRMS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on General Mills (NYSE: GIS), Daimler AG (NYSE: DAI) and Saks, Inc. (NYSE: SKS).
Full analysis of all these stocks is available at
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Here is a synopsis of all five stocks:
Bull of the Day: Time Warner Telecom (Nasdaq: TWTC)
We upgrade our rating from Hold to a Buy for Time Warner Telecom, a leading provider of managed voice & data networking solutions for businesses, as the company has been successful in transforming its offerings as a diversified network services provider to large enterprises and lowering its business dependence on telecom carrier customers. TWTC's first quarter 2008 financial results were significantly above our estimates. The company continues to generate sustaining revenue from enterprise customers, primarily from sales of Ethernet and IP-based services. Growth prospects for the company remain firm as a result of massive demand for bandwidth to implement converged IP-based networks.
Bear of the Day: Trimeris, Inc. (Nasdaq: TRMS)
Trimeris, Inc. develops therapeutic agents for the treatment of viral diseases based on its fusion inhibition technology that blocks viral entry into host cells. The collaboration amendment with Roche and several management changes have cast a shadow on the company's future. The company registered a 34 percent year-over-year decline in Fuzeon sales for the first quarter of 2008. We attribute the decline to the withdrawal of the sNDA for Biojector 2000 along with approvals of competitors Selzentry and Isentress. The decline may be steeper going forward.
Latest Posts on the Zacks Analyst Blog:
General Mills (NYSE: GIS)
Productivity initiatives and new product introductions should help General Mills achieve high single-digit earnings growth in the long term. Management is implementing a strategy to enhance shareholder value.
Debt was issued in fiscal 2007 for the first time in about two years, raising the company's net debt position. Now management is once again in the process of deleveraging the balance sheet. Also, higher input commodity costs are impeding meaningful margin expansion, though hedges are mitigating the impact. The stock is rated a Hold.
Daimler AG (NYSE: DAI)
Daimler AG is benefiting from aggressive efficiency initiatives, cost reduction efforts and new model launches. The company is likely to benefit from its focus on the emerging markets including Russia, China and India. Strong earnings performance gives a positive view on the stock.
However, the company is facing many challenges including exchange rate fluctuations, weak auto pricing, rising raw material costs, compliance with CO2 emission reductions, as well as a slowing U.S. economy. Hence, we rate it a Hold with a six-month target price of $85.00, which is based on a P/E multiple of around 9.6x our 2008 earnings estimate.
Saks, Inc. (NYSE: SKS)
Saks, Inc. reported solid sales for the first quarter of 2008. Sales were up 8.6% with comp-store sales for 8.4%. After slowing to around 4% in January and February, monthly comps appear to be rounding. However, that is still well below the double-digit comps it produced in 2007.
More importantly, the uptick in sales growth is expected to negatively affect the company's gross margins. We are reducing our fiscal 2008 EPS estimates to reflect our view that Saks will experience weaker profit margins throughout the fiscal year.
Our target price of $14 is about 25x our 2009 EPS estimate. Saks shares are trading at 29.8x our fiscal 2008 EPS estimate and 24.3x our fiscal 2009 EPS estimate. Saks is scheduled to report first quarter results on May 21.
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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.
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Mark Vickery
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