Zacks Bull and Bear of the Day Highlights: Coca-Cola FEMSA, Stoneridge, Equity Office Properties and L-3 Communications

Business Wire, May 4, 2006

CHICAGO -- Zacks Equity Research highlights Coca-Cola FEMSA (NYSE:KOF) as the Bull of the Day and Stoneridge, Inc. (NYSE:SRI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Equity Office Properties (NYSE:EOP) and L-3 Communications Holdings (NYSE:LLL). 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 Coca-Cola FEMSA S.A. de C.V. (NYSE:KOF). The company's Mexican and South American business (particularly Brazil) has been posting solid results, and the first quarter 2006 was no different. The short-term outlook for Latin America remains promising, now that both Brazilian and Mexican interest rates are declining. We are also encouraged by the continued debt reduction, a necessary step after the acquisition of Panamco. The company also had good results in Central America, even though the local business environment remains challenging.

Bear of the Day:

Our Bear of the Day recommendation is for Stoneridge, Inc. (NYSE:SRI). Rising raw material costs, falling prices and sluggish demand for light vehicles are some of the factors that will cloud the stock's performance in the near future. Furthermore, restructuring charges and operational inefficiencies lead us to take a negative stance over the stock. Thus, we rate the stock a Sell and set our six-month target price at $3.00.

Analyst Blog:

We continue to rate the shares of Equity Office Properties (NYSE:EOP) a Sell. Poor operations continued in the 1st quarter, as large rent roll downs continue, occupancies are still low, but increasing, and cap ex spending is high. The company recently cut its dividend 34% as EQR continues to suffer a deficit to free cash flow. Earnings will continue to suffer dilution through dispositions, as the company cannot replace lost income fast enough. There are better office REIT alternatives with safer dividends. However, we are starting to see improving fundamentals in some of the company's key markets. It seems that overall absorption is increasing, which should lead to better occupancies in the coming 12 months.

We saw strong 1st quarter operating and financial results at L-3 Communications Holdings (NYSE:LLL), wherein the company delivered growth across multiple business segments prompted management to raise its 2006 sales and earnings guidance. This trend of growth is expected to continue through 2006-07 due to an impressive product portfolio, earnings growth through both organic means and accretive acquisitions, and strong free cash flow. Accordingly, we reiterate our BUY recommendation on LLL common stock with a six-month target price of $88.50. Price appreciation to our near-term valuation target, combined with the increased $0.1875 per share quarterly dividend - which we deem to be very secure - represents annualized total return potential of 18.3%.

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.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

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.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=2677.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros by going to http://at.zacks.com/?id=2650.

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.