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Zacks Bull and Bear of the Day Highlights: ViroPharma, Cost Plus, Union Pacific, Methanex and L-3 Communications

^{Published on 2008-12-03 04:58:09 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--Zacks Equity Research highlights ViroPharma Incorporated (Nasdaq: VPHM) as the Bull of the Day and Cost Plus, Inc. (Nasdaq: CPWM) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Union Pacific Corp. (NYSE: UNP), Methanex Corporation (Nasdaq: MEOH) and L-3 Communications (NYSE: LLL).

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: ViroPharma Incorporated (Nasdaq: VPHM)

ViroPharmaposted very strong financial results for the third quarter. Vancocin sales blew away expectations, coming in at $65.9 million, up 29%. Vancocin continues to benefit from impending treatment guideline changes and ViroPharma's new specialty salesforce.

The acquisition and approval of Cinryze greatly strengthens the company's future prospects. We expect management to be in position to launch the product in the next few weeks. Besides strong Vancocin sales and the Cinryze approval, both phase III trials on maribavir are progressing on plan.

ViroPharma Inc.'s business fundamentals are strong. Sales and earnings are outpacing expectations and the company should exit the year with over $300 million in cash on hand. We are maintaining our Buy rating with a price target of $16.

Bear of the Day: Cost Plus, Inc. (Nasdaq: CPWM)

As expected, Cost Plus reported disappointing results for the third quarter. The company's sales trends have been weak for some time, and the current macro economic headwinds are not helping the company's prospects.

Mall traffic suffered a severe decline in September, and those trends should continue throughout the holiday shopping season. This will further pressure the company's sales and profit margins.

What's more, losses are mounting, and its balance sheet remains weak. This combination does not point to a higher stock price. We reiterate our Sell rating and our six-month target price of $0.50.

Latest Posts on the Zacks Analyst Blog:

Union Pacific Corp. (NYSE: UNP)

We are retaining our Hold on Union Pacific,but cutting our target price to $53. In line with earnings guidance provided on September 22, UNP posted 3rd quarter EPS of $1.38, up 37% year over year, and better than consensus of $1.30 and our estimate of $1.15, largely due to higher-than-expected revenue growth and declining fuel costs that contributed about $0.10 per share. Revenues advanced 16% as higher rates (revenue per car up 22%) offset a 5% volume decline.

We are raising our 2008 diluted EPS estimate from $4.15 to $4.54, the mid-point of revised earnings guidance of $4.50-4.60 range (up from $4.00-4.20 before), and our 2009 EPS estimate to $5.10 from $5.00.

Methanex Corporation (Nasdaq: MEOH)

Methanex Corp. is the world's largest supplier of methanol. Headquartered in Vancouver, British Columbia, Canada, Methanex has production facilities in Chile, Trinidad and New Zealand. The company is benefiting from improving fundamentals. New applications for methanol imply strong future growth. Potential markets for methanol include dimethyl ether and bio-diesel businesses.

However, the company is afflicted by natural gas supply shortages and rising energy costs. It saw production declines of 30,000 tons of methanol at its Trinidad facility and abandoned operations at its Waitara Valley facility in New Zealand. Methanex also incurred negative cash margins on reselling methanol purchased from other producers. Further, the current global financial crisis has lowered demand for the company's products. This forces us to rate the stock a Hold with a target of $10.50.

L-3 Communications (NYSE: LLL)

L-3 Communications Holdings Inc.is a leading supplier of a broad range of products and services used in a number of aerospace and defense platforms. The company supplies subsystems on many platforms that are used for secure communication networks; mobile satellite communications; information security systems; shipboard communications; naval power systems; fuses and safety & arming devices for missiles and munitions; microwave assemblies for radars and missiles; telemetry and instrumentation; and airport security systems.

L-3 reported stable 3rd quarter 2008 results with sales up 6% year-over-year, net income up 6.5%, and fully-diluted EPS up 11%. The company's funded backlog increased 18% to $11.3 billion, with a book-to-bill ratio of 1.08 during the recently reported 3rd quarter of 2008.

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