City Bancorp, Maguire Properties and Caterpillar
Zacks Equity Research highlights eBay, Inc. (Nasdaq: EBAY) as the
Bull of the Day and Hudson City Bancorp (Nasdaq: HCBK) as the Bear of
the Day. In addition, Zacks Equity Research provides analysis on
Maguire Properties (NYSE: MPG) and Caterpillar (NYSE: CAT). Full
analysis of all four stocks is available at
¶ Here is a synopsis of all four stocks:
¶ Bull of the Day:
¶ Our Bull of the Day recommendation is for eBay, Inc. (Nasdaq:
EBAY). eBay has been a tough stock to own during 2006 as the market
wrangled with the company's slowing growth rate and large
acquisitions. Unfortunately, this short-term view of the stock
completely ignores the company's still powerful business model. We
suggest that investors look past quarterly EPS figures and focus on
eBay's ability to generate free cash flow, which remains quite strong.
Our discounted cash flow analysis estimates eBay to be worth $60 per
share. While we don't expect the stock to more than double overnight,
we do think eBay's upside is greater than its downside at current
levels. We maintain our Buy rating and $37 six-month target price.
¶ Bear of the Day:
¶ Our Bear of the Day recommendation is for Hudson City Bancorp
(Nasdaq: HCBK). We are reiterating our $12 price target in
anticipation of Q3 earnings. We are taking this opportunity to refine
our interest rate and asset growth assumptions, and our estimates are
ticking down marginally as a result. The Sound Federal acquisition
closed on July 14. As discussed in our July 19 note, Q2 results were
again weak overall, in our view. Diluted EPS of $0.13 was a penny
short of our estimate and consensus. Non-interest income was ahead of
our projections, but spread income was significantly light. Non-comp
expenses were a full 10% higher than projected, with most of the
increase buried in other. We view the $0.30 annual dividend as secure.
¶ Analyst Blog:
¶ We are raising our target price on Maguire Properties (NYSE: MPG)
to $44.00 per share. Operationally, MPG had a weaker-than-expected
quarter, and missed our 2nd quarter estimates by $0.10 per share due
to higher-than-expected leasing costs and expenses. We have recently
lowered our full-year FFO estimates to $2.30 per share. However, our
investment thesis on MPG still remains true. The company has a
concentration of class-A office properties in some of most supply
constrained markets in the country. Operations should improve as
market occupancies in Southern California continue to rise. In
addition, MPG is ramping up development and dispositions in a still
expensive market for office buildings.
¶ Caterpillar (NYSE: CAT) reported a 41% increase in second-quarter
EPS to $1.52, amid continued end-market demand for mining-machinery,
petroleum-related engines, and road construction equipment. The
fundamentals behind these markets remain positive. Nevertheless, we
lowered our FY07 EPS estimate to $6.47 from $6.57 on expectations of
lower operating margins driven by a sharp deceleration in commercial
and residential construction activity and slower pricing growth. To
adjust for the most recent contraction in the industry P/E multiple,
we are applying a multiple of only 11x to CAT's peak FY07 EPS. Our
target price is now $71.25.
¶ Get the full analysis of all four stocks by going to
¶ 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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impacting stocks and the financial markets.
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¶ (a)The Zacks Performance Rank performance is the total return of
equal weighted simulated portfolios consisting of those stocks with
the indicated Zacks Rank net of fees. Results reflect the reinvestment
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actual trading and may not reflect the impact that economic and market
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¶ Disclaimer: Past performance does not guarantee future results.
Investors should always research companies and securities before
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Terry Ruffolo, 312-630-9880, ext. 213
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