Zacks Bull and Bear of the Day Highlights: Prologis, BJ's Wholesale, AutoZone and Montpelier Re

Business Wire, May 24, 2007

CHICAGO -- Zacks Equity Research highlights Prologis (NYSE: PLD) as the Bull of the Day and BJ's Wholesale Club (NYSE: BJ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on AutoZone, Inc. (NYSE: AZO) and Montpelier Re (NYSE: MRH). 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 Prologis (NYSE: PLD). The company had a good quarter, reporting FFO of $1.25 per share, exceeding our estimates by $0.18 per share. With continued rental rate and occupancy increases, same store operating net income increased 5.6% vs. last years 1st quarter. The entire industrial sector is being propelled by positive absorption, and limited new supply deliveries in most North American and international markets. PLD continues to realize strong gains from merchant building, as asset valuations are still near historical highs. In addition, the company is ramping up its property funds management business which contributed a significant portion to FFO in 1st quarter. The stock has traded off over the past couple of months due to a sell off in the sector. The company is attractively valued on a P/FFO basis.

Bear of the Day:

Our Bear of the Day recommendation is for BJ's Wholesale Club (NYSE: BJ). BJ's first quarter earnings were $0.02 ahead of our estimate, but management maintained its full-year EPS guidance of $1.60-$1.70. We are increasing our 2007 EPS estimate by $0.02 to reflect the upside, but our 2007 EPS estimate is still below company guidance. We would continue to avoid the stock, which is still facing competitive pressures from larger industry players, Costco and Wal-Mart. Moreover, BJ shares trade at 22.5 times our fiscal 2007 EPS estimate, which we believe prices in a takeover premium. We would not use the hope of a private equity buyout to justify buying BJ shares. We reiterate our Sell rating. Our target price goes from $23 to $26, which is 15 times our 2008 EPS estimate.

Analyst Blog:

AutoZone, Inc. (NYSE: AZO) is one of the leading retailers of automotive parts and accessories. The company has significant cash flow and plans to expand its square footage growth. AutoZone has taken steps to maintain a mid-single digit square footage growth rate by opening new stores every year. Category management efforts and supply chain initiatives undertaken by AZO are likely to be offset by higher staffing costs. Moreover, AZO is suffering from sluggish same store sales. We maintain our Hold recommendation on AutoZone, with a six-month target price of $135.00.

Operating 1Q07 results for Montpelier Re (NYSE: MRH) were three pennies shy of our expectations, based on a slightly lower revenue base for the quarter. MRH should benefit from exponentially rising prices in the property catastrophe reinsurance [cat re] market (property > 75% of MRH's premiums), as the company has replenished its reserve additions via capital raising and declining some renewal business.

Get the full analysis of all four stocks by going to http://at.zacks.com/?id=2649.

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