Zacks Bull and Bear of the Day Highlights: Rockwell Automation, Avici Systems, FTI Consulting and Arena Pharmaceuticals

Business Wire, March 3, 2008

CHICAGO -- Zacks Equity Research highlights Rockwell Automation (NYSE: ROK) as the Bull of the Day and Avici Systems (Nasdaq: AVCI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on FTI Consulting (NYSE: FCN) and Arena Pharmaceuticals, Inc. (Nasdaq: ARNA). Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all four stocks:

Bull of the Day:

Our Bull of the Day recommendation is for Rockwell Automation (NYSE: ROK). Rockwell Automation is a leading industrial automation company, providing power, control and information solutions to improve manufacturing capacity. The company reported first quarter EPS of $1.04, up 36.8% from the prior-year quarter, amid strong productivity performance and higher sales volume. Acquisitions are now providing more top-line boost, but at the cost of mitigating operating leverage. Management is confident that recent growth investments and international diversification will deliver FY2008 revenue up 10-12% (including acquisition/FX of 4%), with international sales expected to deliver mid-teens organic growth and North America accelerating modestly to mid-single-digits. We reiterate our Buy rating on shares of ROK with a target price of $65.00 per share.

Bear of the Day:

Our Bear of the Day recommendation is for Avici Systems (Nasdaq: AVCI). Although strong end-of-life router sales are driving better-than-expected revenue and a higher cash balance, our long-term outlook for Avici Systems remains unchanged. We believe Soapstone offers a unique product and are encouraged by its compatibility with Nortel and Extreme, however we expect revenues to ramp slowly. Six months from now, investors will likely be concerned about a lack of visibility into revenue growth from software. As such, we maintain a Sell rating on the shares with a six month price target to $6.50.

Analyst Blog:

We maintain our Hold rating on shares of FTI Consulting (NYSE: FCN) following the release of solid fourth quarter results. Given that top line growth continues to benefit from strong demand across the company's operating segments, with EBITDA margin remaining relatively stable, we believe that the shares will continue to trade at a premium to the peer group. For fiscal 2008, management has a strong forecast. Assuming organic revenue growth of 17.5% to 19.5%, management expects revenue to be $1.28 billion to $1.31 billion with EBITDA estimated between $300 million and $310 million. Fully-diluted shares outstanding are expected to be approximately 54 million. Net income is expected between $129 million and $135 million with diluted EPS between $2.40 and $2.50.

Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) is a biopharmaceutical company with its primary expertise in the area of G protein-coupled receptors (GPCRs). Arena focuses its research and development on four key pharmaceutical areas: Metabolic, Cardiovascular, Central Nervous System and Inflammatory disorders. The first six-month EDSMB review on the phase III Lorcaserin trial was cleared in September 2007. This was as expected. However, the 12-month review is the key hurdle in our opinion. In the meantime, Arena continues to burn significant cash and is hinting at a go-it-alone strategy for Lorcaserin potentially up to the NDA filing.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

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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