Zacks Analyst Blog Highlights: Wet Seal, Inc., Freeport-McMoRan Copper & Gold, Inc., Johnson Controls, Inc., Syngenta AG and Monsanto Co

Business Wire, August 27, 2008

CHICAGO -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Wet Seal, Inc. (Nasdaq: WTSLA), Freeport-McMoRan Copper & Gold, Inc. (NYSE: FCX), Johnson Controls, Inc. (NYSE: JCI), Syngenta AG (NYSE: SYT) and Monsanto Co. (NYSE: MON).

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Here are highlights from Tuesday's Analyst Blog:

Wet Seal Weathering Storm

Wet Seal, Inc. (Nasdaq: WTSLA) reported solid results for the second quarter. The company's sales increased 4% year-over-year, and earnings increased 51%. The management also provided third-quarter guidance of sales between $145-$149 million and EPS of $0.05-$0.07. This compares to our previous estimates of $151 million and $0.05. We are lowering our estimates to reflect slower sales growth for the next few quarters.

That said, we expect the company to continue to benefit from cost controls, inventory management, and fewer store openings. However, those factors won't be enough to overcome the weaker sales trends. We maintain our Hold rating.

Freeport-McMoRan With Heft

Freeport-McMoRan Copper & Gold, Inc. (NYSE: FCX) reported second quarter EPS of $2.62, down 23.2% year-over-year, primarily due to lower sales volumes of copper and gold because of mine sequencing at the Grasberg mine in Indonesia.

Freeport-McMoRan was able to offset the increase in costs with the help of high copper and gold prices. The company has a strong cash flow position and several growth projects in its pipeline. The merger with Phelps Dodge Corporation has positioned FCX as the second-largest copper producer and the largest publicly traded copper company globally. We maintain our positive outlook and Buy rating on the stock. Our target price of $99.75 is based on around 8.9x our 2008 EPS estimate.

Johnson Controls Guidance Down

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

The Delphi acquisition enables Johnson Controls to participate in the rapidly growing Asian automotive battery market. In the Power Solutions segment, JCI has received the three lithium-ion battery contracts available in the industry excluding Toyota. The company expects a lithium-ion battery ready for production by 2010 to be used in the gasoline electric hybrid vehicles.

Syngenta Poised for Growth

We remain buyers of Syngenta AG (NYSE: SYT) after the company's third quarter results. We retain our target price at $65 as re-rating continues. The depth of its product mix, robust business model and highly regarded management team support our positive view on the stock. We believe Syngenta is one of the safest plays on the sector, which should be reflected in higher valuations.

Syngenta is trading at 21.0x our 2008 EPS estimate. We think the discount to Monsanto Co. (NYSE: MON) is still unwarranted. We are aware of Monsanto's efforts and progress in Genetic Modified seeds versus Syngenta's, which have lagged, but a 70% premium valuation is still difficult to justify.

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