Health & Fitness
Health and Fitness
Health and Fitness 
Tue, January 13, 2009
Zacks Bull & Bear of the Day Highlights: Baxter International, MarkWest Energy, D.R. Horton, The Gap and Harley-Davidson
CHICAGO--([ BUSINESS WIRE ])--Zacks Equity Research picks Baxter International, Inc. (NYSE: [ BAX ]) as Bull of the Day and MarkWest Energy (NYSE: [ MWE ]) as Bear of the Day. In addition, the analysts at Zacks Equity Research discuss the latest on D.R. Horton (NYSE: [ DHI ]), The Gap (NYSE: [ GPS ]) and Harley-Davidson (NYSE: [ HOG ]).
Full analysis of all these stocks is available at: [ http://at.zacks.com/?id=2678 ]
Bull of the Day
Baxter International, Inc. (NYSE: [ BAX ]) is a global medical products and services company with expertise in medical devices, pharmaceuticals and biotechnology. BAX operates three main lines of business: BioScience, Medication Delivery, and Renal.
We believe these markets will remain relatively insulated from the current economic turmoil, providing investors good quality returns on a risk-adjusted basis. Baxter's strong market position is demonstrated in its recent quarterly performance that exceeded estimates and led management to increase fiscal 2008 EPS guidance for the second quarter in a row.
Our 2008 EPS estimate remains within management's guidance of $3.35-$3.37. We believe BAX should trade at a 20% premium to the group P/E/G average of 1.2. The resulting P/E is 19.7x 2008, producing a target price of $66.25.
Bear of the Day
We are downgrading MarkWest Energy (NYSE: [ MWE ]), a predominantly natural gas gathering and processing MLP, from Hold to Sell. We believe that it will be difficult for MarkWest to sustain current distribution levels in the face of weak commodity prices and reduced access to credit.
An unfavorable macro backdrop, characterized by reduced access to credit and equity markets and weak commodity-prices is expected to weigh on the partnership's distributable cash flows, forcing it to cut distributions to conserve capital.
We are projecting that MarkWest Energy will slash its distributions by 50% to the annualized rate of $1.27 per unit. Our new price target is $7.00 per share.
Recent Analysis from the Analyst Blog
Savings, Consumption & the Economy
This recession has the potential to be much deeper and longer than is currently accepted by the majority of investors and the public. Without a well-designed stimulus package (and Government spending rising to take up some of the slack caused by falling PCE), this economy could be in extreme danger.
Even with a big package, we are in for a difficult time. I would avoid the entire Consumer Discretionary sector. This most certainly includes homebuilders like D.R. Horton (NYSE: [ DHI ]), retailers like The Gap (NYSE: [ GPS ]) and makers of toys for big boys like Harley-Davidson (NYSE: [ HOG ]).
Just as Augustine prayed, "Lord, make me Chaste, but not yet," America needs to pray, "Lord, make me Thrifty, but not yet" -- or at least make us thrifty gradually.
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: [ 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.
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.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting [ http://at.zacks.com/?id=2677 ].
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at [ http://at.zacks.com/?id=4582 ].
Visit [ http://www.zacks.com/performance ] for information about the performance numbers displayed in this press release.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.