Zacks Analyst Blog Highlights: Polycom, Inc., Buffalo Wild Wings, General Motors Corp., Wal-Mart Stores, Inc. and Costco Wholesale Corp

Business Wire, Oct 16, 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: Polycom, Inc. (Nasdaq: PLCM), Buffalo Wild Wings (Nasdaq: BWLD), General Motors Corp. (NYSE: GM), Wal-Mart Stores, Inc. (NYSE: WMT) and Costco Wholesale Corp. (Nasdaq: COST).

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Here are highlights from Wednesday's Analyst Blog:

Polycom a Hold, Pre-Earnings

Polycom (Nasdaq: PLCM) is a leading provider of voice/video conferencing solutions. The company is expected to report results at the close of business on October 15th.

Business enterprises on a global basis are facing restrictive travel budgets as economic weakness is evident. Under this scenario, Polycom's high-definition telepresence solutions have generated impressive growth in an increasingly interactive world. However, reduction in sales of the company's high-margin Network Systems products and intensifying competition in this segment remain concerning.

Buffalo Wild Wings Upped to Hold

Buffalo Wild Wings (Nasdaq: BWLD) headquartered in Minneapolis, Minnesota, owns a chain of 515 casual dining restaurants in 37 states. Boasting a track record of strong annual growth and a viable strategy, the company is well positioned, in our view, to attain its annual growth targets of 15% for units, 20% for revenue and 25% for net income over the next three years. We upgrade the stock to a Hold.

A key growth driver will be the company's ability to continue its recent improvement in company-owned average weekly sales and bring it in line with its franchisees. However, the company's shares trade at a large premium to the restaurant growth group and hold substantial risk, given the company's high exposure to the price of chicken wings.

GM Remains at a Disadvantage

General Motors' (NYSE: GM) weak North American sales, falling production volumes and rising raw material costs are increasing our concerns for the stock. Significant incentives to stimulate sales and keep inventories lean are eating into margins.

Furthermore, GM sales are hampered by poor resale values. The company is at a disadvantage compared to its competition, owing to huge pension and healthcare costs. These issues compel us to rate the shares a Sell with a six-month target price of $4.

Retail Sales Numbers Not Good

I would stay far away from the retailers, particularly those that focus on the middle class. The discount stores, like Wal-Mart (NYSE: WMT) and Costco (Nasdaq: COST) might just be able to pick up enough business from those people looking for cheaper places to get their stuff to offset lower overall consumer spending.

This is shaping up to be the worst holiday season since at least the early 1980's. If retailers do not have a decent Christmas, they simply have a bad year.

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