Zacks Bull and Bear of the Day Highlights: URS, Navarre, Deckers and Coca-Cola FEMSA

Business Wire, Oct 31, 2006

CHICAGO -- Zacks Equity Research highlights URS Corporation (NYSE: URS) as the Bull of the Day and Navarre Corporation (Nasdaq: NAVR) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Deckers (Nasdaq: DECK) and Coca-Cola FEMSA S.A. de C.V. (NYSE: KOF). 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 URS Corporation (NYSE: URS). We expect URS to report third-quarter EPS of $0.58, consistent with the prior-year level, amid strong federal business and growth in private sector business. We have raised our FY06 & FY07 revenue forecast on federal to 11% from 9% due to Congress' recent approval of additional funding for military operations in Iraq and a favorable budget outlook for O&M spending. Regarding private sector, high oil prices keep us optimistic on the near and intermediate term picture. We believe oil companies will continue to reinvest profits back into refinery upgrades and pipeline projects. On top of these positive factors, the rise in state and local budgets should lead to sorely needed infrastructure spending in FY07. We retain our Buy rating on the stock.

Bear of the Day:

Our Bear of the Day recommendation is for Navarre Corporation (Nasdaq: NAVR). We expect Navarre's second-quarter results (which are scheduled for October 30) to be similar to its disappointing first quarter report. We are leaving our estimates unchanged. We maintain our Sell rating on the stock. Our target price is $3.25, which is 10 times our fiscal 2007 EPS estimate. Our bearish view stems from the company's low-margin business model, risky growth strategy and leveraged balance sheet.

Analyst Blog:

Simply put, Deckers (Nasdaq: DECK) hit the ball out of the park with its third quarter earning report. Its third quarter sales were $7 million above our estimate, and its EPS were $0.28/share ahead of our estimate. To reflect the upside, we increased our 2006 EPS estimate by $0.31 and our 2007 EPS estimate by $0.21. Moreover, we continue to believe that DECK is a Buy-rated stock because of its substantial long-term growth potential and attractive valuation. Its shares trade at 17 times our 2007 EPS estimate, which is still below our estimate of the company's long-term earnings growth rate of 20%. We think the stock has the strength to reach 20 times our 2007 EPS estimate, or $62, which is our new target price.

Upgrading KOF to Buy

We are changing our current recommendation on Coca-Cola FEMSA S.A. de C.V. (NYSE: KOF) from Hold to Buy. The company posted very positive figures for third quarter 2006, improving revenues and gross profit in all its territories, reducing its debt and producing its solid net income. Additionally, the short-term outlook for Latin American economic growth is positive, and Coca-Cola FEMSA's valuation is still attractive compared to other similar companies.

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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