Zacks Analyst Blog Highlights: NVIDIA Corp, Sunoco Logistics Partners, L.P., ExxonMobil Corp., Spectranetics Corp. and Medtronic Inc

Business Wire, July 8, 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: NVIDIA Corp. (Nasdaq: NVDA), Sunoco Logistics Partners, L.P. (NYSE: SXL), ExxonMobil Corp. (NYSE: XOM), Spectranetics Corp. (Nasdaq: SPNC) and Medtronic (NYSE: MDT).

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Here are highlights from Monday's Analyst Blog:

Expect Margin Pressure for NVIDIA

Product-related issues for NVIDIA Corp (Nasdaq: NVDA) such as the transition from the G80 to G92 series and the recently discovered failure of certain notebook products will pressure gross margins, which we believe will continue for few quarters. We therefore maintain a Hold rating on the shares.

To remain competitive, NVIDIA has invested heavily in research and development, which increased 25.0% in fiscal 2008 and 38.2% in the first quarter of fiscal 2009, and may require more investment, which could further dampen margins. In addition, NVIDIA faces risks associated with international operations as nearly 92% of fiscal 2008 revenue has been from businesses outside the U.S.

Sunoco Logistics' Limited Upside

We are maintaining our Hold recommendation on Sunoco Logistics Partners, L.P. (NYSE: SXL) units ahead of the partnership's second-quarter results. The partnership's last quarterly results were strong and were accompanied by an 8.5% year-over-year increase in quarterly distribution to the annualized rate of $3.58 per unit.

In April, Sunoco bought a refined products pipeline system in Texas and other related assets from ExxonMobil Corp. (NYSE: XOM) for roughly $200 million. The transaction is expected to be immediately accretive to the partnership's cash distribution.

Growing Spectranetics a Hold

Spectranetics Corporation (Nasdaq: SPNC) acquired the endovascular business of Kensey Nash and launched a new Lead Locking Device. SPNC also announced the settlement of intellectual property dispute with Medtronic Inc. (NYSE: MDT).

At its current price of $9.72 per share, SPNC is trading at 3.1x our current fiscal year revenue estimate of $106 million, which is at a discount to the group average multiple of roughly 3.5x. We believe the stock is fairly valued at 3.5x our 2008 revenue estimate. Our target price is therefore $11.00.

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