Zacks Bull and Bear of the Day Highlights: ENSCO International, KeyCorp, United Pacific, Odyssey Healthcare and LSI Corporation

Business Wire, July 30, 2008

CHICAGO -- Zacks Equity Research highlights ENSCO International (NYSE: ESV) as the Bull of the Day and KeyCorp (NYSE: KEY) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on United Pacific (NYSE: UNP), Odyssey Healthcare (Nasdaq: ODSY) and LSI Corporation (NYSE: LSI).

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: ENSCO International (NYSE: ESV)

ENSCO reported better-than-expected second quarter 2008 earnings, reflecting improvement in average dayrates and contribution from deepwater assets. We have raised our 2008 ($8.47 vs. $8.20) EPS estimate to reflect the continued strength in dayrates while keeping our 2009 estimate unchanged.

We continue to like the stock for the company's growing deepwater exposure, strong performance of its premium jackup rigs, and an exceptionally strong balance sheet. We believe that continued investments in its fleet along with share buybacks will generate significant returns to shareholders.

Bear of the Day: KeyCorp (NYSE: KEY)

KeyCorp reported a 2Q08 loss from continuing operations of $2.70 per share, due primarily to $2.43 per share charge related to adverse federal tax court ruling on a lease adjustment. The results were also hurt by higher credit cost. Credit quality worsened significantly during the quarter.

Though the company has taken steps to reduce its exposure to the Commercial Real Estate (CRE) residential properties segment, we anticipate higher losses in the CRE portfolio in the coming quarters, particularly in view of its sizeable exposure to the difficult markets of California and Florida.

After reviewing the results, we are maintaining our Sell rating on the shares of KEY, with a six-month price target of $11.00 per share.

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United Pacific (NYSE: UNP)

We are retaining our Hold on Union Pacific Corporation. Our target price is $80. UNP posted second quarter EPS of $1.02, up 24% year-over-year and better than consensus of $0.92 and our estimate of $0.91, largely due to higher-than-expected revenue growth.

We are raising our 2008 diluted EPS estimate from $4.07 to $4.15, near the high end of the management's increased $4.00-4.20 range and our 2009 EPS estimate to $5.00 from $4.75. UNP should benefit from higher rates on contract renewal pricing and improved productivity, which should offset expected volume weakness and higher fuel costs. UNP recently increased its dividend by 26%.

Odyssey Healthcare (Nasdaq: ODSY)

Our Hold recommendation on Odyssey Healthcare Inc. remains intact at current levels pending the release of second-quarter results. Our current revenue and EPS estimates are $162 million and $0.12 respectively versus consensus estimates of $164 million and $0.11.

Industry fundamentals remain strong. We believe growth momentum will persist over the medium to long term, given the aging population. In addition, a growing awareness of hospice care alternatives is broadening the mix of hospice admission diagnoses. We believe, Odyssey's strong track record of integrating acquisitions, a well developed and centralized operational model and strong cash flow from operations augur well for continued growth via acquisition and the establishment of greenfield programs.

LSI Corporation (NYSE: LSI)

LSI Corporation continues to build on its leadership in Serial Attached SCSI (SAS) and RAID on Chip (RoC) technologies. The revenue drivers from these new technologies are coming through but will become more meaningful in late-2008/early-2009 time frame when share gains in hard disk drive space begin to accelerate. Until then, headwinds from a deteriorating macroeconomic environment remain a significant risk for the story.

LSI reported revenue of $692 million, above consensus expectations of $665 million. The company guided Q3:FY08 to a midpoint of $710 million in revenue above consensus expectations of $693 million, supported by seasonal Q3 expectations and relative strength at LSI storage customers. The upside surprise this quarter was the resilience of LSI's end markets and position coupled with stability in the company's business model.

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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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