Zacks Equity Research highlights Crocs, Inc. (Nasdaq: CROX) as the Bull of the Day and ChoicePoint (NYSE: CPS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Amgen, Inc. (Nasdaq: AMGN) and Caterpillar (NYSE: CAT). Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all four stocks:
Our Bull of the Day recommendation is for Crocs, Inc. (Nasdaq: CROX). We are upgrading CROX shares from Hold to Buy. The stock down 61% from its October peak, and it looks attractively valued at just 11.2x our 2008 EPS estimate. While we do not expect CROX to move back to previous high near $75 in the next few months, we do expect the stock to easily outperform the broader market. Our six-month target price is $44, which is 17x our 2008 EPS estimate and represents a P/E-to-growth ratio of just 0.85x. Crocs is scheduled to report fourth quarter results on February 20.
Our Bear of the Day recommendation is for ChoicePoint (NYSE: CPS). ChoicePoint has embarked on a strategy of internal growth and is focusing on its core business lines. We believe that over time, the company will be headed in the right direction. However, it will take time for these initiatives to show results, and in the meantime the company is facing declining revenues from its mortgage business that will likely persist for the next few quarters. We therefore maintain our Sell rating on CPS shares and lower our price target to $30.00.
Amgen, Inc. (Nasdaq: AMGN), a global biotechnology company, is focused on the development and commercialization of human therapeutics. The company's key products are Epogen/Aranesp (anemia), Neupogen/Neulasta (neutropenia) and Enbrel (inflammatory disease). Recent negative events surrounding lead product Aranesp have punished the shares greatly. Results in the third quarter demonstrate the challenging ESA market. Nevertheless, we still feel as though the pipeline is significantly undervalued, and we continue to recommend the name as a long-term Hold within the biotechnology sector. Our price target is $56.
Caterpillar (NYSE: CAT) reported fourth quarter EPS of $1.50, above the $1.32 reported a year ago, due to a lower share count, a reduction in SG&A and R&D costs, increased price realization, and higher International sales volume. Caterpillar plans to up FY08 R&D spending by 20% to support an investment in new products. Also, it plans to allocate capital to add capacity in growth markets outside the U.S. Our FY08 EPS estimate of $5.59 assumes 4% earnings growth. This forecast assumes continued strength in machine and engine sales to Africa, the Middle East, Asia-Pacific and Latin America, but a greater-than-anticipated slowdown in the U.S and Western European construction markets than CAT currently anticipates. Our target price is $68.00.
Get the full analysis of all these 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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