Zacks Analyst Blog Highlights: St. Joe Company, Countrywide Financial and Bausch & Lomb

Business Wire, Sept 18, 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: St. Joe Company (NYSE:JOE), Countrywide Financial (NYSE:CFC) and Bausch & Lomb (NYSE:BOL).

See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673

Here are highlights from Friday's Analyst Blog:

Market Cools on St. Joe

St. Joe Company (NYSE:JOE) badly missed 2nd quarter 2006 estimates. There was a marked slowdown in sales of the company's resort homes and home sites in Northwest Florida. As expected, the housing market is cooling. We have again lowered our full-year 2006 estimates from $1.65 to $1.00 per share. We expect this slowdown to continue throughout 2006 as speculators continue to leave the market.

Although, our original thesis on the company holds true today, and we still think the company is a good long-term investment. JOE still has an unparalleled development pipeline and enormous land holdings concentrated in one of the fastest growing regions in the U.S. The company is in the process of reorganizing its business line to cope with slowing residential markets.

Getting Conservative on Countrywide

We are reiterating our Hold rating on shares of Countrywide Financial (NYSE:CFC), while reducing our estimates and price target. CFC released August statistics Thursday morning, showing originations down 24% from August 2005. We have revised our origination forecast down slightly as a result.

Valuation actually appears more attractive to us now than it has in some time, but we view the considerable uncertainty in the mortgage markets at present as a near-term increase in risk. Hence, we would need to see a bit higher projected return in order to raise our rating at the moment.

In addition, our estimates are significantly above consensus, and the valuation would look much less compelling using the consensus figures. We view the company's $0.60 dividend as secure.

BOL Downgraded to Sell

We are reducing our Bausch & Lomb (NYSE:BOL) rating to Sell from Hold on valuation based on our current estimates. The company faces possible NYSE delisting if it is unable to complete its filings by September 30, 2006.

While the company is making progress to restore its financial house, continued possibility of further guidance reduction exists. At 17x our 2007 EPS of $2.49, roughly equivalent to a 1.1x P/E/G that is approximately a 10% group discount, our target is $43.00.

See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645

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