Zacks Bull and Bear of the Day Highlights: AK Steel, CSX Corporation, Alcon, Hudson City Bancorp and LM Ericsson

Business Wire, June 30, 2008

CHICAGO -- Zacks Equity Research highlights AK Steel (NYSE: AKS) as the Bull of the Day and CSX Corporation (NYSE: CSX) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alcon, Inc. (NYSE: ACL), Hudson City Bancorp (Nasdaq: HCBK) and LM Ericsson (Nasdaq: ERIC).

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: AK Steel (NYSE: AKS)

We expect AK Steel's cost reduction efforts and renegotiated higher-priced contracts to prevent excessive margin deterioration in light of higher commodity costs. The company has greater product diversification compared to its peers and is focusing on markets and products which have the greatest long-term potential for success. We believe the company will gain from new projects, higher selling prices, and increased shipment. Hence, we reiterate the Buy rating and raise our six-month target price to $69.00.

Bear of the Day: CSX Corporation (NYSE: CSX)

We are maintaining our Sell rating on CSX Corporation due to valuation, as we believe the shares have been overbought and that CSX is expensive on a fundamental basis. CSX will report second quarter results on July 15. We are retaining our 2008 EPS estimate at $3.55, near the top of CSX guidance of $3.40-3.60, as well as our 2009 estimate at $4.00.

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Alcon, Inc. (NYSE: ACL)

Alcon, Inc. continues to post solid growth despite being faced with several issues including patent challenges and expirations as well as pipeline setbacks. The lofty valuation the shares trade at likely leaves little room for significant appreciation in the near term. We like the stock as a long-term holding and rate the shares a Hold.

All three major businesses lines at Alcon should continue to generate strong top-line growth. Impressive performance from all major business lines along with seemingly sustainable high single-digit sales growth and controllable expenses for the foreseeable future adds up to a strong set of fundamentals. Tax incentives will additionally benefit EPS.

Hudson City Bancorp (Nasdaq: HCBK)

Though Hudson City Bancorp, Inc. does not participate in subprime loans, we fear that a viral type contagion might creep upwards and negatively impact its mortgage loan portfolio. The recent rate cuts by the Fed to reverse the subprime crisis will take some time. However the company has benefited from an improved yield curve, followed by the recent rate cuts by the Fed.

The negatives with respect to credit quality for the banking industry has yet to fully been realized and should continue to weigh on the industry as home sale continue to wane at this time. While the shares of HCBK have rebounded, we will maintain our Sell rating until sustainable data points have emerged.

LM Ericsson (Nasdaq: ERIC)

LM Ericsson Telephone Company experienced operator consolidation and delays in mobile telecom roll-outs across Europe and Asia. Political uncertainty played havoc as well, which caused its product mix to be more-heavily weighted towards lower-margined products and services. This, in turn, reduced the company's overall margins and earnings significantly during the first quarter.

Although the company's share price has stayed flat after a severe correction, we remain concerned about the near-term outlook for the industry as a whole as competition continues to drive pricing lower. We continue to rate shares of ERIC a Hold.

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