For Immediate Release

Chicago, IL – April 22, 2010 – Zacks Equity Research highlights Microchip Technologies (MCHP) as the Bull of the Day and Diageo Plc. (DEO) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Morgan Stanley (MS), AT&T (T) and Verizon (VZ).

Full analysis of all these stocks is available at

Here is a synopsis of all five stocks:

Bull of the Day:

Microchip Technologies (MCHP) recently increased its guidance for Q4:FY10 driven by increased demand from customers in Asia and Europe. In particular, China continues to be strong after the New Year while Europe is expected to exceed seasonally strong March quarter results.

The company now expects sales to be up 8% sequentially compared to the previous guidance of 3-7%. Microchip expects record bookings in the quarter, which bodes well for the next quarter. Inventory is expected to be flat to down in the March quarter.

With signs of recovery, we raise our estimates following management’s upbeat guidance and expect Microchip to deliver solid results in the coming quarters. The dividend yield of 4.49% continues to be the key attractive feature of the stock. Hence, we upgrade our rating to Outperform from Neutral.

Bear of the Day:

We are downgrading our recommendation on Diageo Plc. (DEO) to Underperform from Neutral as we anticipate it to perform well below the broader market. The global economic downturn has negatively impacted demand for Diageo’s premium offerings, thereby affecting both top- and bottom-line performance.

Moreover, the company is facing intense competition from other well-established players, which are aggressively expanding their presence through mergers and acquisitions. Further, exposure to seasonal fluctuations and adverse foreign currency translations also undermine the company’s future growth prospects and profitability.

Diageo’s ADR is trading at a discount to the peer group, based on forward earnings estimates. Our long-term Underperform recommendation on the stock indicates that it would perform well below the broader market. Our target price of $64.00, 14.1X 2010 EPS, reflects this view.

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Morgan Stanley Outshines Estimates

Morgan Stanley (MS) reported first quarter 2010 operating net income of $1.8 billion or $1.03 per share, compared to a net loss of $17 million or 41 cents per share in the year-ago quarter.

The results were substantially ahead of the Zacks Consensus Estimate of 59 cents per share. Post-economic crisis, Morgan Stanley marked the third consecutive quarter of income in a year’s time.

GAAP net income per share was 99 cents, compared with a net loss of 57 cents in the year-ago period. The reported quarter included a loss of $932 million on the planned disposition of Revel Entertainment Group, LLC, a subsidiary of Morgan Stanley, which was partially offset by a gain of $775 million related to a legal settlement with Discover Financial Services.

AT&T Beats but Profit Dips

AT&T (T) has not released any financial forecast for the second quarter. For 2010, it envisages stable revenue and stable-to-improved earnings and operating margins. The forecast takes into account the dilutive impact of roughly 5 cents to 6 cents associated with the carrier’s impending acquisition of specific wireless assets from archrival Verizon (VZ). However, AT&T does not expect pension retiree benefit costs to drag the bottom-line in 2010.

Moreover, AT&T expects strong free cash flow in 2010 despite an incremental investment in wireless, Ethernet backhaul and U-verse. Total capital expenditures for the year have been projected in the range of $18 billion to $19 billion, an increase from $17.3 billion in 2009. The company aims to achieve a wireless OIBDA service margin in the low-40% range in 2010 with a long-term target in the mid-40% range.

Moving forward, we expect that the iPhone, which has been the lifeblood for AT&T’s wireless business, will continue to perform in line with expectations and boost data revenues. Other positive aspects are represented by higher dividend payouts and opportunities for margin expansion.

Get the full analysis of all these stocks by going to

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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