Zacks Equity Research highlights Petroleum Development (Nasdaq: PETD) as the Bull of the Day and Ford Motor Company (NYSE: F) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Myriad Genetics, Inc. (Nasdaq: MYGN), Foster Wheeler (Nasdaq: FWLT) and General Growth (NYSE: GGP).
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: Petroleum Development (Nasdaq: PETD)
We are maintaining our Buy recommendation on Petroleum Development shares following the company’s strong second-quarter results. The company’s story remains strong as the low risk drilling in its three Colorado operating areas, along with accretive acquisitions, will provide the fuel for double digit production growth through 2010.
Record commodity prices have allowed PETD to increase its developmental drilling activities by 50 net wells in 2008. Other near term value may be found from exploratory drilling on the company’s Barnett and Marcellus shale acreage, two areas with a substantial amount of natural gas in place.
Bear of the Day: Ford Motor Company (NYSE: F)
Ford’s market share is likely to fall continuously due to its inclination to push pickup truck sales. The company is facing overcapacity, which leads to weak pricing. Moreover, costs are higher due to product launches and higher incentives. The company dropped its plans to become profitable by 2009 due to a difficult operating environment including an uncompetitive cost structure. These lead us to rate the stock a Sell and set a six-month target price of $4.00.
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Myriad Genetics, Inc. (Nasdaq: MYGN)
The recent discontinuation of Myriad Genetics’lead candidate Flurizan, a treatment for Alzheimer's disease, concerns us about the company's growth strategy. The failure to achieve statistical significance for either of the primary endpoints in the phase III trial of Flurizan led to the discontinuation of the development program for the drug in June.
The company has engaged an investment bank to revisit its growth strategy, but we do not know what the next step would be at this point. We do not think separation of the predictive medicine and the therapeutic program will create much value for the shareholders. We are concerned about the post-Flurizan uncertainty for the company in the next a few quarters and downgrade the shares from Buy to Hold.
Foster Wheeler (Nasdaq: FWLT)
Given the uncertainties that have crept into worldwide financial expectations, we have maintained our Hold opinion on Foster Wheeler, Ltd. Our six-month target price is based on current market conditions, which are erratic and have been known to change quickly and violently.
For the longer term, FWLT is actively developing oxy-combustion technology for both circulating fluidized-bed boiler technology (CFB) and pulverized coal (PC) boilers, as oxy-combustion is one part of a practical solution for capturing and storing the majority of the CO2 from coal power plants.
Investment in new oil and gas, refining and petrochemicals/chemicals facilities, and modernization, expansion and upgrading of existing facilities in these sectors is expected to continue to be robust throughout the remainder of fiscal year 2008.
General Growth (NYSE: GGP)
General Growth Properties is the second largest shopping center owner, manager, and developer in the US. Currently, the company owns and manages a portfolio of more than 200 regional shopping malls in 44 states.
Despite weakening consumer spending patterns, operations held up relatively well in the 2nd quarter. The company reported solid increases in SS NOI [same-store net operating income] and overall portfolio occupancy. Shares of GGP have fallen over 40% in the past three months. There has been some speculation that GGP will not be able to refinance all of its near term debt.
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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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