Zacks Bull and Bear of the Day Highlights: Baker Hughes, CSX Corporation, TRW Automotive, Kinross Gold and Ultimate Software

CHICAGO--(BUSINESS WIRE)--Zacks Equity Research highlights Baker Hughes, Inc. (NYSE: BHI) 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 TRW Automotive Holdings (NYSE: TRW), Kinross Gold (NYSE: KGC) and Ultimate Software Group (Nasdaq: ULTI).

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: Baker Hughes, Inc. (NYSE: BHI)

We reiterate our Buy recommendation and EPS estimates for Baker Hughes shares ahead of the company’s second-quarter results. Despite the company’s relatively soft results in the last quarter, our long-term view of the business remains favorable.

We expect strong revenue growth during the second half of 2008, powered by an improved North American outlook and continued international expansion. Being a premium oilfield service player, the company remains well positioned to capitalize on the current oilfield cycle.

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

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. Improved efficiency, strong yields, and share buybacks should offset weakening volumes from a slowing economy and higher fuel costs.

Results of the June 25 board election will be announced on July 25, though two activist funds claim they’ve won four seats on the board of directors. CSX just increased the dividend 22%.

Latest Posts on the Zacks Analyst Blog:

TRW Automotive Holdings (NYSE: TRW)

TRW Automotive has excellent long-term prospects, primarily because of the increasing emphasis being put on safety awareness by both government and consumers. The management is re-evaluating the company's cost structure and is keen on undertaking restructuring activities.

However, the company may be affected by constant production cuts by original equipment manufacturers (OEM), pricing pressure, and lower production volumes in North America. Thus, we rate the stock a Hold with a target price of $19.00.

Kinross Gold (NYSE: KGC)

Higher gold prices bode well for Kinross top-line growth. Kinross Gold Corp. has received approval for a huge investment in the Paracatu mine expansion, which is expected to start production in July. The various exploration and expansion activities undertaken will enhance production levels. The Bema acquisition will result in various synergies.

However, declining production levels at some of the existing operations and higher mining, energy, and administrative overhead costs are likely to constrain margin expansion. Consequently, we reiterate our Hold recommendation on shares of KGC, with a six-month target price of $21.00.

Ultimate Software Group (Nasdaq: ULTI)

The Ultimate Software Group, Inc. is growing at a double-digit rate, and appears to be gaining acceptance in large organizations with more than 2,500 employees. Over the long-term, the company expects to achieve its target operating margin of 30%, up from a single-digit rate.

We believe Ultimate Software is well-positioned to take advantage of growth in on-demand payroll systems, and the company has been executing its strategy well. The company has been making progress in its operating metrics. The company generated $29.1 million from operating activities during 2007 versus $15.4 million in the year-ago period. Operating cash flow grew to $10.5 million in the first quarter of 2008 from $3.6 million in the year-ago quarter and $8.8 million sequentially.

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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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