Zacks Equity Research highlights Crocs, Inc. (Nasdaq: CROX) as the Bull of the Day and Auxilium Pharmaceuticals (Nasdaq: AUXL) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Exxon Mobil (NYSE: XOM) and UBS AG (NYSE: UBS). Full analysis of all four stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all four stocks:
Bull of the Day:
Our Bull of the Day recommendation is for Crocs, Inc. (Nasdaq: CROX). We are upgrading CROX shares from Hold to Buy and increasing our target price from $55 to $88. The company simply blew away our estimates and increased full-year guidance. In our view, the company's business momentum remains stellar both domestically and internationally. Moreover, we think Crocs will easily beat its current earnings guidance, and we are increasing our 2007 EPS [earnings per share] accordingly. Given that the market continues to underestimate the strength of the Crocs brand and it's trading at a P/E [price-to-earnings]-to-growth ratio of less than one, we believe there is substantial upside potential in the shares.
Bear of the Day:
Our Bear of the Day recommendation is for Auxilium Pharmaceuticals (Nasdaq: AUXL), a specialty pharmaceutical company focused on treating diseases and conditions that accompany aging. The company's only approved product is Testim, a 1% testosterone gel indicated for the treatment of hypogonadism. We are concerned that the termination of Auxilium’s co-promotion agreement for Testim could have a negative impact on the product’s growth prospects. We are also worried about the renewed promotional efforts behind Testim's main competitor in the gel prescription market - AndroGel (Solvay Pharmaceuticals), which is the current market leader. We do not see Auxilium achieving profitability over the next few years and recommend investors to avoid the name. We rate the stock a Sell with a price target of $12.
Analyst Blog:
Exxon Mobil's (NYSE: XOM) first-quarter results came in better than expected due to exceptionally strong chemical results. The company raised its quarterly dividend by 9.4% and continued with its very active buyback program. We continue to like the stock for its best-in-class upstream business, a chemicals business that is fully integrated with its refining assets, an exceptionally strong balance sheet, and a track record of returning capital to shareholders.
We are maintaining our Buy on UBS AG (NYSE: UBS), as well as our $68 target price. UBS reported first quarter earnings from continuing operations of CHF3.3 billion, up 11% from a year ago and well above our estimate on strong revenue growth, particularly in trading income, underwriting fees, and asset-based fees on solid asset inflows. Despite this, the market was disappointed due to the closing of an in-house hedge fund. We think this is shortsighted. We are raising our 2007 EPADS [earnings per American Depositary Shares] estimate to $5.13 from $4.83, and initiating our 2008 estimate at $5.62.
Get the full analysis of all four 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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