Zacks Analyst Blog Highlights: D. R. Horton, Starwood Hotels, Host Hotels and Dr. Reddy's

Business Wire, Jan 25, 2007

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: D. R. Horton (NYSE: DHI), Starwood Hotels & Resorts (NYSE: HOT), Host Hotels & Resorts (NYSE: HST) and Dr. Reddy's Laboratories, Ltd. (NYSE: RDY).

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

Here are highlights from Wednesday's Analyst Blog:

D. R. Horton Misses

D. R. Horton (NYSE: DHI) reported first quarter EPS of $0.50, below our expectations of $0.78, due to greater-than-anticipated gross margin pressure. Average selling prices fell in three of the six markets DHI serves, and we believe there is heightened risk of price decline in the other three markets by year-end. With inventories still high nationwide, the company will try to reduce costs to bring down selling prices and boost demand. However, this will not completely solve the affordability picture; a general rise in income and drop in mortgage rates are also needed.

Without these macro factors turning more positive, we expect increased incentive use to keep gross margins under pressure for the rest of fiscal year 2007. The stock has moved dramatically in advance of a real recovery in the housing market, hence, we maintain our Hold recommendation but caution investors to tread carefully and to restrain from adding share to their portfolio at the current price.

Maintaining Our Buy on Starwood

We maintain our Buy rating for Starwood Hotels & Resorts (NYSE: HOT). We believe that the recent sale of certain real estate assets to Host Hotels & Resorts (NYSE: HST) will allow the company to continue to focus on managing its unique brands, returning value to shareholders, and growing its vacation ownership and ancillary businesses. The company is scheduled to report fourth quarter financial results on February 1, and we will update our model and outlook at that time.

Starwood derives the majority of its revenue from its full-service, luxury/upscale brands, including Sheraton, Westin, St. Regis, The Luxury Collection, W, Four Points by Sheraton, and Le Meridien. The majority of the company-owned properties are operated under the Sheraton and Westin brands and located in major North American markets.

RDY an Off-Patent Play

Dr. Reddy's Laboratories, Ltd. (NYSE: RDY) is a global pharmaceutical company located in Hyderabad, India. RDY produces active pharmaceutical ingredients (API), finished dosage forms, and branded and generic pharmaceutical products for the global market. The company has a healthy pipeline and is an active participant in terms of international product filings.

During fiscal 2007, RDY experienced both top-line and bottom-line growth thanks to many products going off-patent over the past several months. RDY currently has 58 ANDAs filed with the U.S. FDA, which should present future growth opportunities for the company.

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

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