Zacks Analyst Blog Highlights: Nortel Networks, Verizon, Shanghai Petrochemical, Monogram Biosciences and Pfizer

Business Wire,  June 17, 2008  

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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: Nortel Networks Corporation (NYSE: NT), Verizon (NYSE: VZ), Shanghai Petrochemical (NYSE: SHI), Monogram Biosciences, Inc. (Nasdaq: MGRM) and Pfizer (NYSE: PFE).

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Here are highlights from Monday's Analyst Blog:

Nortel Networks at a High Premium

Nortel Networks Corporation - ADS (NYSE: NT) is a leading developer of telecom equipments. We maintain our Hold rating with a higher valuation target for Nortel as we expect a series of customized products designed for IP-based converged networks from the company over the near term.

The company has taken a strategic decision to revamp next-generation (4G) wireless offerings in order to introduce WiMax and LTE solutions faster to the market, in some cases ahead of its competitors. Telecom gear manufacturers are likely to be challenged by tightened capital budget of carriers due to ongoing recessionary conditions in the global economy. It was necessary for management to appropriately plan its product roadmap to focus more on growth markets.

We believe this new business strategy will solidify Nortel's position in the wireless equipment market. Furthermore, the company received a major contract for its high-speed Metro Ethernet switch from Verizon (NYSE: VZ).

Shanghai Petrochem Branches Out

Shanghai Petrochemical's (NYSE: SHI) exposure to the fast-expanding Chinese economy and strong petrochemical product demand make us confident of strong volume growth. However, future revocation of government price controls, higher crude oil prices and increased competition are some of the major concerns for the company.

Thus, we rate the stock a Hold with a six-month target price of $42.00. This is 9.7x our 2008 EPADS estimate.

Our outlook for the Chemical and Fertilizer industry is positive. Investors should over-weight chemical stocks now. The group is likely to outperform the S&P in the next six months. We should see earnings that are in-line expectations.

Monogram Must Manage Growth

We maintain our Hold rating on Monogram Biosciences, Inc. (Nasdaq: MGRM), as we believe the shares are fairly valued at the current level. We are optimistic about its HIV Test products and the potential of its VeraTag Assay for cancer test. However, we would like to see how Monogram manages its top- and bottom-line growth before we recommend the shares.

The worldwide launch of Pfizer (NYSE: PFE) anti-HIV drug maraviroc coupled with the increased use of Monogram's Trofile assays for clinical candidates currently under development for HIV treatment will lead to the company processing an increasing number of tests every quarter. This should help Monogram post impressive revenue growth in 2008.

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