Zacks Bull and Bear of the Day Highlights: eBay, Inc., Hudson City Bancorp, Maguire Properties and Caterpillar

Business Wire, Sept 28, 2006

CHICAGO -- Zacks Equity Research highlights eBay, Inc. (Nasdaq: EBAY) as the Bull of the Day and Hudson City Bancorp (Nasdaq: HCBK) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Maguire Properties (NYSE: MPG) and Caterpillar (NYSE: CAT). 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 eBay, Inc. (Nasdaq: EBAY). eBay has been a tough stock to own during 2006 as the market wrangled with the company's slowing growth rate and large acquisitions. Unfortunately, this short-term view of the stock completely ignores the company's still powerful business model. We suggest that investors look past quarterly EPS figures and focus on eBay's ability to generate free cash flow, which remains quite strong. Our discounted cash flow analysis estimates eBay to be worth $60 per share. While we don't expect the stock to more than double overnight, we do think eBay's upside is greater than its downside at current levels. We maintain our Buy rating and $37 six-month target price.

Bear of the Day:

Our Bear of the Day recommendation is for Hudson City Bancorp (Nasdaq: HCBK). We are reiterating our $12 price target in anticipation of Q3 earnings. We are taking this opportunity to refine our interest rate and asset growth assumptions, and our estimates are ticking down marginally as a result. The Sound Federal acquisition closed on July 14. As discussed in our July 19 note, Q2 results were again weak overall, in our view. Diluted EPS of $0.13 was a penny short of our estimate and consensus. Non-interest income was ahead of our projections, but spread income was significantly light. Non-comp expenses were a full 10% higher than projected, with most of the increase buried in other. We view the $0.30 annual dividend as secure.

Analyst Blog:

We are raising our target price on Maguire Properties (NYSE: MPG) to $44.00 per share. Operationally, MPG had a weaker-than-expected quarter, and missed our 2nd quarter estimates by $0.10 per share due to higher-than-expected leasing costs and expenses. We have recently lowered our full-year FFO estimates to $2.30 per share. However, our investment thesis on MPG still remains true. The company has a concentration of class-A office properties in some of most supply constrained markets in the country. Operations should improve as market occupancies in Southern California continue to rise. In addition, MPG is ramping up development and dispositions in a still expensive market for office buildings.

Caterpillar (NYSE: CAT) reported a 41% increase in second-quarter EPS to $1.52, amid continued end-market demand for mining-machinery, petroleum-related engines, and road construction equipment. The fundamentals behind these markets remain positive. Nevertheless, we lowered our FY07 EPS estimate to $6.47 from $6.57 on expectations of lower operating margins driven by a sharp deceleration in commercial and residential construction activity and slower pricing growth. To adjust for the most recent contraction in the industry P/E multiple, we are applying a multiple of only 11x to CAT's peak FY07 EPS. Our target price is now $71.25.

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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