Zacks Bull and Bear of the Day Highlights: Millennium Pharmaceuticals, Arkansas Best, Apple, Inc., Johnson Controls and Telefonica

Business Wire, April 14, 2008

CHICAGO -- Zacks Equity Research highlights Millennium Pharmaceuticals (Nasdaq: MLNM) as the Bull of the Day and Arkansas Best Corporation (Nasdaq: ABFS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Apple, Inc. (Nasdaq: AAPL), Johnson Controls (NYSE: JCI) and Telefonica (NYSE: TEF). Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day: Millennium Pharmaceuticals (Nasdaq: MLNM)

Millennium Pharmaceuticals, Inc. is a drug discovery and development company. The company's key product is Velcade. Although Velcade's growth slowed down in 2006 due to stiff competition from Celgene's Revlimid and Thalidomide, sales reaccelerated in 2007. The recent encouraging phase III data for 1st line treatment of MM could expand Velcade label and boost top line growth further in 2008 and beyond. Realizing the potential of Velcade, Takeda decided to acquire Millennium at $25 per share. As such, we maintain our Buy rating on Millennium shares with a new price target of $25.

Bear of the Day: Arkansas Best Corporation (Nasdaq: ABFS)

We are reducing our recommendation on Arkansas Best Corporation to Sell from Hold due to valuation. ABFS is now trading at a premium to the industry, which is not justified by its fundamental outlook, in our view. We expect freight volumes to be hurt by continuing economic weakness through 2008's first half, though yields should remain stable as industry pricing continues rational. Rising fuel costs due to surging oil prices will also be a major headwind. ABFS will report 2008 first quarter results on April 23. Our 2008 EPS estimate remains at $2.30. ABFS posted fourth quarter diluted EPS of $0.54, down 4% from 2006 s fourth quarter, meeting consensus, but $0.04 below our estimate, largely due to higher fuel costs. We believe the dividend is safe.

Latest Posts on the Zacks Analyst Blog:

Apple, Inc. (Nasdaq: AAPL)

The strength of Apple's iPod business has carried over into its computer business, and we expect Macintosh to continue taking share from traditional PCs as consumers become more familiar with Apple products and enjoy the enhanced media capabilities. However, we are cautious on consumer spending going into 2008, and believe the market for AAPL's successful iPod line could slow over the next several years.

At its current price of $155.89 per share, Apple's stock is trading at 30.4x our fiscal 2008 estimate of $5.03. Apple's has established a strong track record of earnings growth, which went from a loss of $0.07 per share in 2001, to an expected profit of $5.03 per share in the current fiscal year. With a strong new product pipeline for 2008, including MacBook Air, Mac Pro, iTunes Movie Rentals, and major software upgrade and developer platform for iPhone 2, we believe the stock deserves a premium valuation to its peer group.

Johnson Controls (NYSE: JCI)

Johnson Controls' cost reduction efforts, accretive acquisitions, and healthy operating cash flows are driving the stock. Further, JCI commands a strong market share in the respective markets in which it operates. The company has started benefiting from the York acquisition, and will further benefit as it begins to integrate the Delphi Battery business.

However, a weakening product mix and raw material/price squeeze along with a weak domestic automotive market leads us to rate the stock a Hold with a target of $34.50. The company is experiencing weakness in its North American business, following a general softness in the industry. Although the company has a healthy backlog that would drive automotive sales growth in the long run, launch costs could weigh on near-term results.

Telefonica (NYSE: TEF)

We maintain our Hold rating for Telefonica (NYSE: TEF), the largest telecommunications company in Spain and Latin America. Quarterly results on a sequential basis continue to exceed our expectations. Both the top-line and bottom line improved following recent acquisitions by the company.

However, the environment remains challenging with strong competition, and we are exercising caution about the company's aggressive acquisition strategy, along with the integration process following such initiatives. Telefonica continues to generate strong free cash flow with respectable dividend payout. Also, the stock is trading near its high, reflecting growth projections that may be a stretch.

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.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.