Zacks Bull and Bear of the Day Highlights: Abbott Labs, UAL Corp., National Semiconductor and Overseas Shipholding

Business Wire, Sept 7, 2007

CHICAGO -- Zacks Equity Research highlights Abbott Laboratories (NYSE: ABT) as the Bull of the Day and UAL Corporation (Nasdaq: UAUA) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on National Semiconductor (NYSE: NSM) and Overseas Shipholding Group, Inc. (NYSE: OSG). 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 Abbott Laboratories (NYSE: ABT). Abbott Labs discovers, develops, manufactures and sells a diversified line of healthcare products. We expect a sizable pick-up in earnings growth rate over the next few years driven by strong sales of its lead product Humira, a rapidly growing vascular business, and on several new drug applications recently filed with the FDA. Based on our model, the company is expected to deliver double-digit growth from 2007 through 2010. We believe ABT possesses a low risk profile and will continue to trade at an industry premium. Accordingly, we continue to rate the shares a Buy with a price target of $66.

Bear of the Day:

Our Bear of the Day recommendation is for UAL Corporation (Nasdaq: UAUA). UAL shares are now trading at a substantial premium to the industry, which we do not feel is justified by UAL's fundamental outlook. UAL reported second quarter diluted EPS per share of $1.83, well ahead of the $1.39 consensus and our estimate of $1.52, largely reflecting better expense control than expected. We are increasing our diluted EPS estimates to $2.25 from $1.95 for 2007 and to $3.40 from $3.19 for 2008. We expect only modest revenue growth, based upon reduced domestic capacity and yields, as well as declining revenue from lower third-party fuel sales and maintenance work. Our estimates reflect $400 million of cost take-outs over 2006-07.

Analyst Blog:

In Q4, National Semiconductor (NYSE: NSM) revenue was $455.9 million, up 6% over the prior quarter and above our estimate of $453 million. Earnings came in at $0.28 per share and above our estimate of $0.25. Gross margins in Q4 rose to 62.5% from 59.8% in Q3, due to a richer mix of higher performance products. Overall bookings increased 6% sequentially. Due to a higher opening backlog and a historically low level of distributor inventory, Q1 revenue is expected to rise 1% to 4% sequentially. Moreover, gross margins are expected to reach 63% in Q1. Accordingly, we are reiterating our Buy rating and have raised our target price from $28 to $30.

We are maintaining our Hold on Overseas Shipholding Group, Inc. (NYSE: OSG), but reducing our target price to $69. OSG reported second quarter diluted EPS of $1.63, below our estimate, primarily due to expense growth increasing more than expected. Despite this, we are raising our diluted EPS estimates as we now expect revenues and earnings to benefit from higher TCE [time charter equivalent] rates than we had originally estimated. "Our EPS estimates are now $6.40 for 2007, up from $5.95, and $7.20 for 2008, up from $6.60. We expect revenues to benefit from acquisitions, as well as OSG's strategy of increasing its long-term charter business and decreasing its reliance on the inherently volatile spot market. OSG recently increased its annual dividend by 25% to $1.25.

Get the full analysis of all four 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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