Zacks Analyst Blog Highlights: Diamond Offshore Drilling, Inc., Transocean Inc., ReneSola Ltd., Molson Coors Brewing Co. and Anheuser-Busch Companies, Inc

Business Wire, Sept 25, 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: Diamond Offshore Drilling, Inc. (NYSE: DO), Transocean Inc. (NYSE: RIG), ReneSola Ltd. (NYSE: SOL), Molson Coors Brewing Co. (NYSE: TAP) and Anheuser-Busch Companies, Inc. (NYSE: BUD).

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Here are highlights from Wednesday's Analyst Blog:

Diamond Offshore Leverage Strong

Our continued favorable view of Diamond Offshore (NYSE: DO) shares reflect the company's strong leverage to the favorable deepwater drilling outlook. With a backlog of more than $11 billion, Diamond offers a solid level of earnings and cash flow visibility going forward.

In terms of its deepwater drilling leverage, its closest peer is Transocean (NYSE: RIG), relative to which it continues to trade at a discount. Our unchanged $145 price objective reflects 2009 P/E and EV/EBITDA multiples of 10.8x and 7.0x, respectively, both well within historical trading ranges and still at a discount to Transocean.

ReneSola Upside Shines Brightly

Through its short history, ReneSola (NYSE: SOL) regularly adapted to changing market dynamics. The company is aggressively ramping up its polysilicon and solar wafer production capacities. Going forward, increased captive generation of polysilicon will improve its cost structure and enable wafer capacity expansions.

Accordingly, with a predominantly bullish outlook and an attractive relative valuation, we maintain coverage of SOL with a BUY recommendation and a six-month target price of $20, representing 37.5% upside potential.

Molson Coors Issues Brewing

Molson Coors Brewing Company (NYSE: TAP), formed through the 2005 merger between Molson and Adolph Coors, has improved the company's scale and financial strength. However, higher input costs are compressing the company's overall gross margin and smoking bans are negatively impacting the U.K. operations.

With respect to premium lager-style beer, the three major brewers -- Anheuser-Busch (BUD), Molson Coors, and SABMiller -- control approximately 77% of the market. Growing or even maintaining market share requires increased investments in marketing. The Canadian brewing industry is a mature market and is characterized by intense competition for volume and market share.

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