Zacks Analyst Blog Highlights: Bayer AG, Schering AG, Siemens AG and General Electric

Business Wire, May 2, 2006

CHICAGO -- 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: Bayer AG (NYSE:BAY), Schering AG (NYSE:SHR), Siemens AG (NYSE:SI) and General Electric (NYSE:GE). E[acute accent]See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2673

E[acute accent]Here are highlights from Monday's Analyst Blog:

E[acute accent]Bayer to Benefit from Schering

E[acute accent]Driven by sales gains and enhanced operating leverage, Bayer AG (NYSE:BAY) continues to post impressive results across all its operating segments. The company is investing significantly in research and development in the pharmaceutical and chemical business, and its proposed acquisition of Schering AG (NYSE:SHR) will strengthen the company's position in the HealthCare business. Moreover, an upturn in the petrochemical cycle and improved chemical pricing power are expected to propel growth further, making the stock fairly attractive to investors. E[acute accent]Bayer's recent plan to acquire Schering AG will boost the company's HealthCare business. The combined business will have a leading position in key therapeutics categories like gynecology, hematology, multiple sclerosis, and oncology. The acquisition will also enhance the sales and marketing operations of the company. After the successful completion of the deal, BAY will have 4 products in registration, 19 in Phase III clinical testing, 14 in Phase II trials and 17 in Phase I. Management expects this acquisition to be accretive to earnings by 2008 and is likely to generate positive cash flow by 2009.

E[acute accent]Strong Demand at Siemens

E[acute accent]Siemens AG (NYSE:SI) recently reported a solid fiscal second quarter, with strong revenue growth, but earnings were slightly below our estimates. The company continues to experience problems at its SBS and COMs divisions, which has caused us to lower our estimates for the year, but it is also experiencing strong growth in the rest of its businesses, and we have raised our revenue estimates for fiscal 2006 and 2007. While the company is preaching a slowdown in growth, its order growth continues to increase by over 20%, which bodes well for future quarters. We continue to rate SI a Buy, as the company continues to experience strong demand from China, India, and other emerging economies. E[acute accent]Given its product breadth and geographical diversity, the company should be a major beneficiary of a global economic upswing. Its core businesses are already seeing signs of a pickup in demand (as reflected in recent orders, which have been strong) and are well positioned in areas, such as China and Eastern Europe, where growth is the fastest. In addition, management is in the process of moving more of its operations to low-cost regions, such as China and Eastern Europe. Siemens has also made significant progress in its restructuring efforts over the past several years. Management has been focusing on improving profitability in each of its major businesses, in part through aggressive cost cutting. Each of the underperforming units has been given a timetable for reaching an acceptable level of profitability and several non-core units have already been spun off. E[acute accent]While it will take time for overall corporate profitability to match the levels of General Electric (NYSE:GE), we are encouraged by the progress the company is making, and the strong order intake in the first quarter is only proof that the company stands to benefit from the structural improvements that are taking place around the globe. Finally, Siemens has also finalized several other small acquisitions across several business areas to enhance its market presence in those key areas. E[acute accent]See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645

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