Zacks Bull and Bear of the Day Highlights: Plexus, Neurochem, PetSmart and BASF

Business Wire, Nov 16, 2007

CHICAGO -- Zacks Equity Research highlights Plexus Corp. (Nasdaq: PLXS) as the Bull of the Day and Neurochem, Inc. (Nasdaq: NRMX) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on PetSmart (Nasdaq: PETM) and BASF (Nasdaq: BASFY). Full analysis of all these 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 Plexus Corp. (Nasdaq: PLXS). Plexus has posted several quarters of strong results and raised guidance, indicating that it is past the problems that plagued it earlier in the fiscal year 2007. Moreover, the company continues to work through problems in Mexico and should break-even over the next few quarters. We believe that PLXS is among the best positioned in the industry and is poised to grow in the medical segment as well. We therefore raise our rating on PLXS shares and set six month price target of $44.00.

Bear of the Day:

Our Bear of the Day recommendation is for Neurochem, Inc. (Nasdaq: NRMX). Neurochem, Inc. is a biopharmaceutical company focused on the development and commercialization of products for the treatment of neurological disorders. The company currently has three candidates under various stages of clinical development. However, late-stage pipeline setbacks have sent the company's shares plunging. In July 2007, the FDA issued a second approvable letter for Kiacta, requesting an additional trial and additional pharmacokinetic data. This was followed by negative results from the North American phase III trial of the company's biggest potential product, Alzhemed. With no partnerships for Alzhemed, a significant delay in Kiacta approval and a paltry $70 million in cash, we expect difficult times for the company going forward. As such, we maintain our Sell rating with a target price of $2.

Analyst Blog:

PetSmart (Nasdaq: PETM) reported better-than-expected results for the third quarter, causing its stock to pop 6% on the news. However, we point to October 10, when the company reduced its EPS guidance for the quarter. Essentially, PetSmart's third quarter EPS were in line with its prior outlook. We do not view this report or the company's in-line fourth quarter guidance as reasons to become bullish on the stock. As a result, we maintain our Hold rating on PETM shares. Its valuation looks reasonable, and we expect the shares to track the overall market for the next six months. Our target price is $28, or about 16x our 2008 EPS estimate.

BASF (Nasdaq: BASFY) is witnessing sales and earnings growth due to better end-markets. All segments are experiencing improvements, with the chemicals segment emerging as the primary growth driver. Further, strong volumes and better prices are resulting in market share gains worldwide. The company also remains on track to complete its cost reduction program. All the above factors let us maintain the positive outlook on the stock and thus we rate the stock a Buy. Currently, BASF stock is trading at approximately 12.2x our 2007 earnings estimate of $11.09 per American Depositary Receipts (ADR, which is below the industry median of 17.2x). The company is showing improved performance across all segments.

Get the full analysis of all these 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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