Zacks Bull and Bear of the Day Highlights: Genentech, Salix Pharmaceuticals, CACI International, Consolidated Edison and Align Technology

Business Wire, April 15, 2008

CHICAGO -- Zacks Equity Research highlights Genentech, Inc. (NYSE: DNA) as the Bull of the Day and Salix Pharmaceuticals (Nasdaq: SLXP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on CACI International (NYSE: CAI), Consolidated Edison (NYSE: ED) and Align Technology (Nasdaq: ALGN). 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: Genentech, Inc. (NYSE: DNA)

Our EPS forecasts for 2008 through 2012 have been adjusted higher based on expected higher sales of Avastin going forward. We are also encouraged by the recent positive data on Rituxan in multiple sclerosis (MS). Genentech is the world's premier biotechnology company. The stock has struggled over the past several quarters. However, the pipeline is solid and with renewed Avastin and Rituxan growth, the valuation looks very attractive at this level. We view the name as a core holding.

Bear of the Day: Salix Pharmaceuticals (Nasdaq: SLXP)

The company suffered a major setback in December 2007 when the FDA granted approval to three generic versions of lead product, Colazal. This is devastating news for Salix as Colazal was a significant contributor to both the top-and bottom-line. As such, we expect 2008 to be an extremely challenging year for the company with a significant decline in both revenues and earnings. While new product launches and new indications for Xifaxan should support a recovery in revenues in 2009, we do not expect earnings to recover prior to 2010. We maintain a Sell rating with a target price of $5.

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CACI International (NYSE: CAI)

Based in Arlington, VA, CACI International delivers the IT applications and infrastructure used to improve communications and collaboration, secure the integrity of information systems and networks, enhance data collection and analysis and increase efficiency and mission effectiveness. The company's solutions enhance defense and intelligence capabilities, assure homeland security, improve decision-making, and help customers work smarter, faster, and more responsively.

CAI, serving primarily the U.S. government, derived 94.2% of its fiscal 2007 revenue from it. Its services are categorized as Systems Integration Solutions, Managed Network Services, Engineering Services, and Knowledge Management Solutions. Typical systems integration project goals are improving operational efficiency and cost effectiveness. Services are furnished around the world, and include integration, installation, testing and training.

Consolidated Edison (NYSE: ED)

Stable, regulated utility operations, a strong balance sheet, regulated rate increases, earnings from non-regulated businesses and an increased dividend payout collectively make Consolidated Edison, Inc. a conservative income-based investment story. However, concerns relating to future electricity sales growth and increasing capital expenditures continue to restrain valuation.

Accordingly, with a mixed outlook, we maintain our market-neutral Hold rating on ED common stock with a six-month target price of $43. Despite the mixed outlook for ConEd, in our view, we believe ED stock will attract conservative investors seeking a very competitive 5.7% dividend yield with modest EPS growth.

As of this report, ED trades at 12.9x both our 2008 and 2009 earnings per share estimates, or at a moderate discount to its comparable regulated energy distribution utility peers and the broader electric utility industry. Such an earnings-based multiple discounts are appropriate for ED given low, yet conservative and stable, long-term earnings growth expectations.

Align Technology (Nasdaq: ALGN)

We are reiterating our Hold rating and adjusting our price target for Align Technology lower. We believe a difficult U.S. economy and higher marketing expenses will hamper top-line growth and margins.

Strong international growth and foreign exchange gains will help offset this. In the near-term, we think earnings quality could become an issue as management finds it difficult to meet growth targets. Meaningful earnings growth will be pushed out to FY09 and FY10. Our near-term target price moves to $11.00.

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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