Zacks Bull and Bear of the Day Highlights: ProLogis, Palm, ABM Industries and Banco Santander Santiago

Business Wire, Sept 24, 2007

CHICAGO -- Zacks Equity Research highlights ProLogis (NYSE: PLD) as the Bull of the Day and Palm, Inc. (Nasdaq: PALM) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on ABM Industries (NYSE: ABM) and Banco Santander Santiago (NYSE: SAN). 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 ProLogis (NYSE: PLD). The company had a good 2nd quarter, reporting FFO of $1.16 per share, exceeding our estimates by $0.26 per share. With continued rental rate and occupancy increases, same-store net operating income increased 6.2% vs. 2Q 2006. 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.

Bear of the Day:

Our Bear of the Day recommendation is for Palm, Inc. (Nasdaq: PALM). Palm reported revenue below expectations with EPS slightly better than our estimates due to lower-than-expected stock compensation for the fourth quarter of fiscal 2007. Moreover, revenue guidance for Q1 was below consensus, and margins are falling due to the release of its Foleo. Without a major new product since the Treo 600 was released in 2003 and without a meaningful upgrade since the Treo 650 was released in 2004, we believe the company will struggle to keep pace with competing products. We therefore downgrade PALM shares to Sell with a $10.00 price target.

Analyst Blog:

ABM Industries (NYSE: ABM) reported third quarter EPS of $0.38, above our expectations of $0.29, on account of greater-than-anticipated profit growth in the Parking segment. Even though third quarter sales were a bit on the weak side, ABM walked away from low-margin work, and it incurred difficult year-over-year comparables. The bursting of the private equity bubble took away the valuation premium on its Parking assets, but it will result in more attractively-priced acquisition candidates for the corporate players, such as ABM. We suggest investors hold shares of ABM in their portfolio. Our target price is $22.25 per share.

We are reducing our recommendation on Banco Santander Santiago (NYSE: SAN) to Hold from Buy as the stock has risen 19% since we initiated our Buy on August 17, 2007 and now exceeds our target price. SAN is expected to report third quarter earnings in late October. We are maintaining our EPADS estimates at $3.44 for 2007 and $4.03 for 2008. Earnings should benefit from solid loan growth, strong gains in net interest income, and moderation of expense growth, though provisions should rise as the company expands into higher risk loans. SAN reported second quarter results modestly below our estimate due to higher-than-expected loan loss provisions. SAN has reduced its payout ratio to 65% from 100%, with its indicated annual dividend at $1.94, which still offers a 3.9% yield.

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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