Zacks Bull and Bear of the Day Highlights: SAP, A.G., CVS Corporation, Baxter International and The Coca-Cola Company

Business Wire, July 6, 2006

CHICAGO -- Zacks Equity Research highlights SAP, A.G. (NYSE:SAP) as the Bull of the Day and CVS Corporation (NYSE:CVS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Baxter International (NYSE:BAX) and The Coca-Cola Company (NYSE:KO). 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 SAP, A.G. (NYSE:SAP). We expect SAP to report a solid second quarter, despite the recent strength of the Euro versus the U.S. dollar. The company is expanding its R&D efforts in Asia and Eastern Europe to help cut costs, while its new on-demand CRM platform is beginning to gain traction in the marketplace. We are looking for software revenue growth of 13% year over year, total revenue growth of 9% and earnings growth of 15.6% in the second quarter when the company reports on July 20th. Our price target of $61.60 is based on shares trading at 35x our fiscal 2006 estimate of $1.76, which includes stock based compensation.

Bear of the Day:

Our Bear of the Day recommendation is for CVS Corporation (NYSE:CVS). CVS is one of the leaders in the domestic drug store industry. The company has an aggressive expansion strategy, a relatively sound financial position, and has been reporting good same-store sales growth. However, CVS will experience earnings dilution as the Sav-on and Osco drugstores are integrated into CVS's operations in the second half of 2006. In addition, industry conditions are challenging, particularly from pricing pressure in drug reimbursement rates. The rating on CVS Corporation is a Sell.

Analyst Blog:

Baxter International (NYSE:BAX) reached an agreement with the FDA on the steps needed to be taken by the company to bring COLLEAGUE back to the market. We are adjusting our 2007 estimates upward slightly on the potential for COLLEAGUE in 2007. At roughly 17x our $2.30 2007 EPS estimate, we believe BAX is fairly valued at $39.00. The company is expected to report second quarter fiscal 2006 earnings on July 20, 2006.

The Coca-Cola Company (NYSE:KO) has strong soft drink brands, leading market shares, and generates solid cash flow. The company's CEO, E. Neville Isdell, announced a revitalization plan in November 2004 to deal with the challenges of sluggish volume trends. The plan includes a reduction in the long-term earnings per share growth target from the 11% to 12% range to high single-digits. Though worldwide volume growth has begun to improve, it has required incremental marketing spending of $400 million annually. In addition, volumes continue to decline in several markets, e.g. the Philippines and India. The Hold recommendation is retained.

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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