Zacks Equity Research highlights Maxim Integrated Products (Nasdaq: MXIM) as the Bull of the Day and BJ’s Wholesale Club (NYSE: BJ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Acorda Therapeutics (Nasdaq: ACOR) and Cray, Inc. (Nasdaq: CRAY). Full analysis of all four stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all four stocks:
Bull of the Day:
Our Bull of the Day recommendation is for Maxim Integrated Products (Nasdaq: MXIM). Maxim is an OEM of semiconductor analog and mixed signal ICs. December quarter revenue was in-line with consensus estimates. Both bookings and backlog were down again last quarter, pushing up turns requirements for the fiscal third quarter. Management did not announce further details on the quarter, and expects to restate results from 2000 through 2006 pursuant to the stock option issue. We expect a softer quarter, as management adjusts to the changing profile of business. Additional capacity and a more suitable die bank should support growth in fiscal 2007. The stock is trading at two-year lows, indicating strong upside potential when these issues are resolved. Consequently, we reiterate our Buy rating on MXIM shares.
Bear of the Day:
Our Bear of the Day recommendation is for BJ’s Wholesale Club (NYSE: BJ). The company’s fourth quarter sales were shy of our estimate. We think this disappointment is a precursor of further weakness throughout 2007 for BJ’s Wholesale Club, as competitive pressures from larger industry players eventually take their toll on the company. As a result, BJ’s will have a tough time meeting current earnings estimates. With its stock trading at 18 times our fiscal 2007 EPS estimate, we don’t believe this future slowdown is reflected in its stock price. What’s more, we think the recent surge in BJ shares marks a good exit point. We reiterate our Sell rating and $23 target price.
Analyst Blog:
We are downgrading our rating on Acorda Therapeutics (Nasdaq: ACOR) form Hold to Sell. Recent positive phase III data on Fampridine-SR drove the stock up over 1100%. We expect a regulatory filing in 2008 and a launch in 2009. Based on our current projections, the stock is fairly valued at $17 per share. We think that expectations are too high and there are few catalysts on the horizon to drive the shares much higher. We recommend investors book profits at the current level.
Cray, Inc. (Nasdaq: CRAY) reported its first quarterly profit in recent memory during the fourth quarter as revenue exceeded $100 million. The expected signing of the DoE [U.S. Department of Energy] budget into law will alleviate some of the funding risk to Oak Ridge and other DoE projects, and the DARPA [Defense Advanced Research Project Agency] contract should benefit Cray for years to come. However, 2007 revenue is dependent on three major product launches, which are susceptible to delays. With its improved position, we upgrade the shares of CRAY to Hold with a six-month target price of $14.50.
Get the full analysis of all four stocks by going to 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.
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