For Immediate Release
Chicago, IL – June 3, 2010 – Zacks Equity Research highlights Dow Chemical (DOW) as the Bull of the Day and CONMED (CNMD) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Caterpillar Inc. (CAT), General Motors Corporation (MTLQQ) and General Electric Co. (GE).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506.
Here is a synopsis of all five stocks:
Dow Chemical (DOW) continues to make progress in delivering cost synergies from the Rohm & Haas (ROH) acquisition, which is expected to consolidate the higher margin and higher growth specialty businesses while reducing volatility in earnings and cash flow.
Dow is executing planned divestitures and has fully paid off its burdensome bridge loan related to the ROH acquisition. Dow completed the year ahead of its cost reduction and synergy goals with an end-of-year run-rate of more than $1.7 billion.
The company recently provided an update on its Advanced Material division, where it expects revenue growth of 10% per annum that would drive profitability. Therefore, we upgrade Dow to Outperform from our previous Neutral recommendation.
CONMED (CNMD) competes in the orthopedic surgery markets against much larger, technically-competent companies that possess substantially more assets. However, a large percentage of CONMED’s products are designed for minimally invasive surgery, a trend that is extremely popular these days.
The company depends heavily on acquisitions, which may be difficult to fund during the current weak economic environment. Furthermore, the company needs to obtain operational synergies out of these acquisitions so that they don’t become a waste of resources.
We lowered our revenue and earnings per share estimate for both fiscal 2010 and 2011 based on the susceptibility of Conmed to economic turbulence. We therefore downgrade the stock to Underperform with a target price of $18.
Latest Posts on the Zacks Analyst Blog:
Caterpillar Buys Electro-Motive
In a bid to expand its rail business from service into engine manufacturing, Caterpillar Inc.’s (CAT) wholly owned subsidiary Progress Rail Services entered into an agreement to purchase Electro-Motive Diesel for $820 million in cash from Berkshire Partners LLC and Greenbriar Equity Group LLC. Caterpillar expects to close the deal by the end of 2010, subject to final regulatory approvals.
The acquisition of Electro-Motive Diesel will enable Caterpillar to provide rail and transit customers an industry-leading range of locomotive, engine and emissions solutions, as well as unmatched aftermarket product and parts support and a full line of rail-related services and solutions.
Headquartered in LaGrange, Illinois, Electro-Motive Diesel designs, manufactures and sells diesel-electric locomotives for all commercial railroad applications and has sold its products in more than 70 countries worldwide.
In addition to its manufacturing activities, Electro-Motive Diesel has an extensive aftermarket business, offering customers replacement parts, maintenance solutions and a range of value-added services. The company is also a global provider of diesel engines for marine propulsion, offshore and land-based oil well drilling rigs and stationary power generation. The company generated 2009 revenues of $1.8 billion.
Electro-Motive Diesel was spun off from General Motors Corporation (MTLQQ) in 2005 and was purchased by Berkshire Partners LLC and Greenbriar Equity Group LLC. Pursuant to the closure of this deal, Electro-Motive Diesel will now be a wholly owned subsidiary of Progress Rail Services. With the addition of Electro-Motive Diesel, Caterpillar will now compete directly with General Electric Co. (GE), another major U.S. maker of locomotives.
Since 2006, Caterpillar has been making concerted efforts to grow its rail and transit business due to its positive long-term outlook on the rail sector. Consequently, Caterpillar has made a total investment of $2 billion in this business, including the Electro-Motive acquisition.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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