Zacks Analyst Blog Highlights: The McGraw-Hill Companies, Inc., Marsh & McLennan Companies, Inc., Moody's Corp., AutoZone, Inc. and Aon Corp

Business Wire, Oct 13, 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: The McGraw-Hill Companies, Inc. (NYSE: MHP), Marsh & McLennan Companies, Inc. (NYSE: MMC), Moody's Corp. (NYSE: MCO), AutoZone, Inc. (NYSE: AZO) and Aon Corp. (NYSE: AOC).

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Here are highlights from Friday's Analyst Blog:

McGraw-Hill Murky on S&P Biz

The McGraw-Hill Companies, Inc. (NYSE: MHP) is a diversified publisher and provider of financial information, and also a provider of media services to customers in over 40 countries. The company is a leading textbook publisher and owns one of the top credit rating agencies (Standard & Poor's). It has three business segments: McGraw-Hill Education, Financial Services and Information & Media.

The outlook for McGraw-Hill's Financial Services (45% of revenue) segment is murky as the mortgage-backed securities and CDO markets have dried up. Financial Services operating income is shrinking at mid-20's rate (down 22% in 2Q08) and we don't think it will trough until at least 4Q08 and will likely remain weak through 2009.

Marsh & McLennan Wading Through

Formed in 1871, Marsh & McLennan Companies, Inc. (NYSE: MMC) has long been the world's leading insurance broker, currently operating under the Marsh and Guy Carpenter brands. The company's rapid growth is mainly attributed to its aggressive merger and acquisition strategy. MMC s organization structure and segment reporting is based on the types of services it provides through approximately 55,000 employees worldwide to clients in more than 100 countries.

In December 2007, S&P announced a downgrade of its senior debt credit rating to BBB-, which is the lowest possible investment grade rating for S&P (MHP). Currently, rating by Moody's (NYSE: MCO) on MMC's senior debt stands at Baa2, which is the next-to-lowest investment grade rating for Moody's.

AutoZone's Expansion Difficulties

AutoZone, Inc. (NYSE: AZO) is a leading retailer of automotive parts and accessories. The company has significant cash flow and plans to expand its square footage growth. AutoZone has maintained a mid-single-digit square footage growth rate by opening new stores every year.

New stores led to a rise of over 12% in revenues in the fourth quarter of 2008. However, category management efforts and supply chain initiatives undertaken by the company are likely to be offset by higher staffing costs.

Aon Corp. Holding Its Own

Based in Chicago, Aon Corporation (NYSE: AOC) is the world's largest insurance and reinsurance broker. Through its subsidiaries, the company operates in two broad segments: Risk and Insurance Brokerage Services, and Consulting. The Risk and Insurance Brokerage Services segment (81.8% of the $7.5 billion total revenues in 2007) consists of Aon's retail and reinsurance brokerage operations, which include a broad range of advisory and outsourcing services. The company recently sold Combined and Sterling as part of its strategy to exit the capital-intensive insurance underwriting business.

While AOC continues to win new clients from its business rivals and derive significant cost savings from its restructuring programs, ongoing softening in the property-casualty market will limit any significant margin expansion. After reviewing the results, we are slightly increasing our FY08 and FY09 estimates and maintaining our Hold recommendation on the shares.

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