Zacks Bull and Bear of the Day Highlights: Genentech, SanDisk, ICICI Bank, Hess Corp. and Lamar Advertising

Business Wire, Dec 15, 2008

CHICAGO -- Zacks Equity Research highlights Genentech, Inc. (NYSE: DNA) as the Bull of the Day and SanDisk Corp. (Nasdaq: SNDK) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on ICICI Bank, Ltd. (NYSE: IBN), Hess Corporation (NYSE: HES) and Lamar Advertising Co. (Nasdaq: LAMR).

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)

Genentech is one of the world's largest biotechnology companies. We are reiterating our rating on Genentech at a Buy, and moving our target price to $95 per share.

We remind investors that we upgraded the name in February based on the "Accelerated Approval of Avastin" for 1st-line metastatic breast cancer. Since that time, Avastin sales have outpaced expectations.

However, the real mover of the stock has been Roche's unsolicited $89/share bid to acquire the 44.2% of Genentech it does not already own. Genentech rejected the bid as inadequate in August and there has been little update since. The tightening credit markets and significant stock price declines may have scared Roche into waiting a few more months. However, ultimately we believe a deal will get done at above $95 per share.

Bear of the Day: SanDisk Corp. (Nasdaq: SNDK)

SanDisk reported disappointing Q3 earnings results due to negative product gross margin and excess inventory. We expect the company's earnings losses will be followed in 2009 even with substantial cost cutting and restructuring efforts.

We believe pricing is likely to remain weak until demand improves, which is not likely until the consumer spending picture strengthens. As such, we are reducing our estimates for 2008 and 2009.

We believe there is risk of further downside and do not expect any meaningful improvement in 2009. We therefore maintain our Sell rating on SNDK shares and lower our six month price target to $5.00.

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ICICI Bank, Ltd. (NYSE: IBN)

ICICI is India's second-largest bank and largest private bank, with total assets of about Rs3,998 billion (US$100 billion) at March 31, 2008. ICICI Bank had a network of over 1,308 branches and extension counters and 3,950 ATMs at fiscal year-end 2008.

We are maintaining our Hold recommendation on ICICI, as well as our $18 target price. ICICI reported 2009 fiscal second quarter (September 30) earnings up 1% year over year to Rs10.14 billion, below our estimate, as non-interest income growth slumped 9% on a large decline in other income and loss provisions jumped 43%.

Hess Corporation (NYSE: HES)

New York City-based Hess Corporation, previously known as Amerada Hess Corporation (AHC), is an integrated oil company engaged in oil and gas exploration, production (E&P) and refining as well as marketing. As of year-end 2007, the company's proved reserves tally stood at 1.33 billion oil-equivalent barrels, of which approximately two-thirds consisted of crude oil/liquids.

Hess has slashed its 2009 capital budget in response to the pullback in crude oil prices and credit market turmoil, essentially bringing its outlays inline with projected internal cash flows. The company plans to spend $3.2 billion next year, down from the roughly $5 billion budgeted for 2008.

Lamar Advertising Co. (Nasdaq: LAMR)

Lamar Advertising is a beneficiary of any increase in demand for local advertising. After the current recession, the company should benefit from any rebound in demand for local advertising, which should lead to higher occupancy and increased advertising rates for its billboard businesses.

However, short term, free cash flow is being pressured by lower revenue due to economic weakness, increased capital expenditures in the effort to digitize signs, higher expenses related to the recently acquired outdoor advertising assets, and higher interest expense from the increased debt level. Interestingly, beneficial owner SPO Advisory Corp. has acquired additional shares over the recent months, bringing its total holdings to 20.4% in the company. The Buy rating is maintained due to attractive valuation.

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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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