Zacks Bull and Bear of the Day Highlights: ConocoPhillips, Marriott International, Sanofi-Aventis, SRS Labs and Highwoods Properties

CHICAGO--(BUSINESS WIRE)--Zacks Equity Research highlights ConocoPhillips (NYSE: COP) as the Bull of the Day and Marriott International (NYSE: MAR) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Sanofi-Aventis ADR (NYSE: SNY), SRS Labs, Inc. (Nasdaq: SRSL) and Highwoods Properties (NYSE: HIW).

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: ConocoPhillips (NYSE: COP)

ConocoPhillips has significantly strengthened its upstream portfolio over the last few years through its Burlington and LUKOIL transactions, and remains a premier domestic refining player. Recent alliances with the Abu Dhabi National Oil Company (ADNOC), Saudi Aramco, and Australia’s Origin Energy are catalysts for the company’s future growth.

On valuation grounds, the stock is compellingly cheap, particularly following the recent sell-off. We are reiterating our Buy recommendation for the stock ahead of the company’s third-quarter results. Our estimates and price objective remain unchanged.

ConocoPhillips is also the fourth largest refiner in the world and the second largest in the U.S. Despite its large size, ConocoPhillips is still not part of the group generally referred to as the “super-majors,” which includes the global oil giants, such as Exxon Mobil, BP, Total, Royal Dutch/Shell, and Chevron. We believe that last year’s Burlington acquisition makes ConocoPhillips a strong contender to join that group.

Bear of the Day: Marriott International (NYSE: MAR)

We are lowering our rating on shares of Marriott from Hold to Sell following the release of Q3 financial results. The operating environment in the lodging sector has weakened substantially in recent quarters. Additionally, the company’s timeshare segment is struggling, with sales down and the credit market turmoil preventing the company from completing an expected note sale.

Management now expects RevPAR [revenue per available room] at comparable North American company-operated properties to decline by at least 3% in 2009. Given the current state of industry fundamentals, we expect that RevPAR declines could exceed management’s expectation.

Although we believe that Marriott is well positioned for the long-term, we expect that operating conditions will weaken further before improving. Our price target of $19.50 reflects a multiple of approximately 8x our 2009 EBITDA estimate.

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Sanofi-Aventis ADR (NYSE: SNY)

Sanofi-Aventis, located in France, develops and manufactures pharmaceutical products, primarily for sale in the prescription drug market. The company, which has global operations, focuses on major therapeutic areas such as cardiovascular, central nervous system, oncology and internal medicine formulations. Combined, Sanofi-Aventis is the third largest pharmaceutical company in the world in terms of revenues.

While valuation on the combined company is reasonable, we would like to see more visibility on the potenial longer-term impact of generics before we recommend buying the shares. We rate the shares a Hold with a $38 price target.

SRS Labs, Inc. (Nasdaq: SRSL)

SRS Labs develops and licenses audio technologies to OEMs [original equipment manufacturers] in the home entertainment, portable media device, personal telecom, computing, automotive and broadcasting markets. SRS secured nine wins in the last quarter four in home entertainment, three in portable media devices and two in PCs.

June quarter results, however, were short of consensus estimates, on both the top and bottom lines. Competition remains fierce, and we are apprehensive that the company may not be able to protect and market its IP [intellectual property]. We are reiterating our Hold rating on SRSL shares.

Highwoods Properties (NYSE: HIW)

Highwoods Properties, Inc. is a fully integrated, self-administered real estate investment trust (REIT) that owns or has management interests in office, industrial, retail, and service center properties, including development projects and apartment units. Operationally, the company's properties are performing relatively well; most operating metrics increased in the 2nd quarter and the company is covering is dividend with operating cash.

However, the U.S. economy is rapidly declining and office/industrial owners will get hit the hardest due to continued job losses. We think operations will weaken, and suburban office owners will have difficulty maintaining occupancy and increasing rents.

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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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