Zacks Analyst Blog Highlights: El Paso Corp., Akzo Nobel N.V., Schering-Plough Corp., Moneygram International, Inc. and PMC-Sierra, Inc

Business Wire, July 9, 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: El Paso Corp. (NYSE: EP), Akzo Nobel N.V. (OTC: AKZOY), Schering-Plough Corp. (NYSE: SGP), Moneygram International, Inc. (NYSE: MGI) and PMC-Sierra, Inc. (Nasdaq: PMCS).

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Here are highlights from Tuesday's Analyst Blog:

Growth Potential Big for El Paso

We are upgrading premier pipeline operator El Paso Corp. (NYSE: EP) from a Hold to a Buy based on the quality and growth potential of its two core business segments. EP boasts an industry-leading project backlog with exposure to major consuming markets and an impressive growth profile relative to its peers.

Its exploration and production (E&P) business has taken large strides to solidify its position as a low-risk, high-growth operator onshore the U.S. We are raising our price target from $16.00 per share to $27.00 per share.

Europe Issues Affect Akzo Nobel

Akzo Nobel N.V. (OTC: AKZOY) is enhancing its global position in coatings through acquisitions and internal growth. Recently, the company underwent a major transformation with the sale of its Organon pharma business to Germany-based pharmaceutical company Schering-Plough Corp. (NYSE: SGP) and acquisition of UK-based largest chemical producer Imperial Chemical Industries PLC.

However, rising commodity costs are negatively affecting margins. The company is also facing a difficult environment in Europe. This leads us to rate the stock a Hold with a six-month target price of $73.00.

Mixed Blessings for Moneygram

Moneygram International, Inc.'s (NYSE: MGI) 1Q08 loss of $4.40 per share was substantially worse than the estimates. Financial results from continuing operations included net securities loss of $307.3 million resulting from the realignment of the company's investment portfolio. MGI's strong top-line growth during 1Q08 was totally overshadowed by the investment portfolio losses.

MGI recently received capital and debt infusion from an investment group. Due to our concerns for additional losses in the coming quarters, as well as the possibility of further downgrades, we have further lowered our FY08 estimate. However, we think that the bad news has been priced in the current share price to a great extent and thus, we rate MGI a Hold at present.

PMC-Sierra Tied to Telco Spending

PMC-Sierra, Inc. (Nasdaq: PMCS) designs and develops high-performance integrated circuits for the telecommunications and data networking industries. March quarter top- and bottom-lines beat the consensus estimate. The sequential increase in Q1 revenue was the result of stronger demand in Fiber to The Home (FTTH) and printer chips. The management expects Q2 revenues to be between $135 million to $140 million, or 8 to 12% revenue growth. We maintain our Hold rating and target price of $8.

The intense level of competition is pushing original equipment manufacturers (OEMs) to outsource development, which plays into PMC-Sierra's strength. Another important trend is the growing need for broadband connectivity for wireless and wireline applications and the requirements of service providers to offer higher levels of quality of service.

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