Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Entravision (NYSE: EVC), AGCO Corporation (NYSE: AG) and Praxair (NYSE: PX).
See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673
Here are highlights from Wednesday’s Analyst Blog:
Entravision’s Valuation Lofty
Entravision (NYSE: EVC) continues to participate in the rapidly growing Spanish language media and is attracting advertisers who want to tap the Hispanic market, which is one of the few growth segments of a media industry currently in secular decline. The company continues to convert an increasing percentage of revenue growth into free cash flow and has embarked on a program to use it to repurchase roughly 16% of its outstanding shares a move that should boost ROE [return on equity] and ROIC [return on invested capital].
Nevertheless, we think that, longer-term, the Spanish teen audience will move to English language programs, depressing a strong growth rate that is currently baked into EVC's valuation. It implies that the growth rates for the Spanish-speaking population may be greater than the audience growth for Spanish language broadcasting. These growth rate assumptions are an important component in the premium valuations for Spanish broadcasting companies.
Brazilian Outlook Favors AGCO Corp.
AGCO Corporation (NYSE: AG) reported first quarter EPS [earnings per share] of $0.26, well above our estimate at $0.05, due to better-than-expected profitability in Brazil and a lower interest expense. The rebound in South America continued for the second consecutive quarter, with sales up 34%.
For the remainder of FY07, we expect higher South American sales amid an upward rise in soybean prices. Given the first quarter earnings surprise, continued debt reduction, favorable currency translation and a further rebound in Brazil, we are raising our FY07 EPS estimate to $1.65 from $1.36. We recommend investors hold shares of AG in their portfolio.
Gases Keep Rising for Praxair
Praxair (NYSE: PX) is the largest industrial gases company in both North and South America. Praxair is benefiting from the rising demand for industrial gases worldwide. Sales volumes are strong across the company's major geographic regions. Praxair has done well to improve its key growth platforms of refinery hydrogen, electronics, and healthcare.
The strict capital discipline has led to a surge of free cash flow. We maintain our Buy recommendation on Praxair, with a target price of $75.00.
See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645
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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.
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