Zacks Analyst Blog Highlights: Sappi Ltd., Amylin Pharmaceuticals Inc., Eli Lilly and Co., Rudolph Technologies, Inc. and Tesoro Corp

Business Wire, August 28, 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: Sappi Ltd. (NYSE: SPP), Amylin Pharmaceuticals Inc. (Nasdaq: AMLN), Eli Lilly and Co. (NYSE: LLY), Sycamore Networks, Inc. (Nasdaq: SCMR) and Tesoro Corp. (NYSE: TSO).

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Here are highlights from Wednesday's Analyst Blog:

Sappi Papering Over Cost Issues

Sappi Ltd. (NYSE: SPP) reported 3Q08 earnings of $0.10 per ADR, compared to $0.15 per ADR in the prior year period amid high input costs. The company is emphasizing on cost reductions and implementing price increases to offset higher raw material costs.

The industrywide move to reduce North American and European fine-coated paper capacity is taking off the excess supply from the market. As a global leader in fine-coated paper, though, Sappi could shut-in additional capacity but has not laid out aggressive shut-down plans yet. As a result, we expect a slower price recovery.

Amylin Tanks on Byetta News

This morning, shares of biopharmaceutical company Amylin (Nasdaq: AMLN) are tanking -- down almost 20% as I am posting this blog -- on additional bad news about its diabetes drug Byetta, which has reportedly been found to be responsible for four more deaths, according to an AP report this morning.

And so far, the data would seem to support what Amylin and Eli Lilly (NYSE: LLY) management is saying. Nevertheless, the FDA is looking into the reported cases and the potential causality association with Byetta will be enough to have a negative impact on prescriptions in the coming weeks. As such, we think the stock still deserves a Sell rating, even after today's big slide.

Sycamore Better in Long View

We maintain our Hold recommendation and the same valuation target Sycamore Networks, Inc. (Nasdaq: SCMR), a leader in intelligent bandwidth solutions for fixed and mobile networks.

We believe future demand for agile bandwidth management solutions, across a variety broadband network infrastructures, will improve as telecom carriers seek to deliver flexible bandwidth services, simplify end-to-end provisioning, and create a resilient and scalable optical foundation for value-added voice, video, and data services.

Tesoro Outlook Remains Strong

We are maintaining our Buy recommendation on Tesoro Corp. (NYSE: TSO) shares despite expectations of continued near-term margin weakness on the back of high feedstock costs and increased operating expenses.

The company's realized margin during the second quarter was down 52% from the year-earlier level as record crude oil prices and anemic product demand squeezed margins. However, our long-term view of the business remains favorable, as margins appear to have bottomed and valuations have become particularly compelling.

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