Zacks Analyst Blog Highlights: Bayer A.G. and Jones Soda

Business Wire, March 20, 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: Bayer A.G. (NYSE: BAY) and Jones Soda (Nasdaq: JDSA).

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

Here are highlights from Monday's Analyst Blog:

Bayer A.G. (NYSE: BAY) reported a solid fourth quarter, despite revenues being slightly lower than our estimate. The company continued to improve its EBITDA [earnings before interest, taxes, depreciation and amortization] margins, and its portfolio re-alignment is almost complete.

The HealthCare division continues to improve its margins and growth in 2006 of several drugs, including Levitra, Yasmin, and Kogenate , continue be in the double digits while its cancer drug, Nexavar should help growth continue in 2007. As the CropSciences division continues to see revenues decline, the company's cost-cutting measures have helped improve its profitability. We issue a price target of $64.50 per share over the next six months.

Based on these results, we are now forecasting revenue growth of 10% in 2007, and EBITDA growth of 12%. The company plans to spend 1.7 billion euros ($2.1 billion) on capital expenditures and we have adjusted our cash-flow expectations accordingly. We continue to rate shares of BAY a Buy as the company continues to improve its margins and position its product portfolio for long-term growth.

High Valuation Keeps Jones Soda a Hold

Management at Jones Soda (Nasdaq: JDSA) has been successfully implementing a growth strategy based on introducing innovative new products, employing unique marketing programs, and utilizing multiple channels of distribution. The company is in the early stages of development as a participant in the carbonated soft drink (CSD) industry. Given the stock's recent rally and its high valuation, the rating is a Hold.

Although the company reported strong earnings growth in 2006, cashflow from operations declined 19% to $656 thousand. Management cites that an increase in working capital needs reduced cashflow. In addition, as sales increased 16%, accounts receivable grew 87% in 2006.

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

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