Zacks Bull and Bear of the Day Highlights: Viacom, Eli Lilly, Wells Fargo, Bank of America and Ford Motor Co.

CHICAGO--(BUSINESS WIRE)--Zacks Equity Research highlights Viacom (NYSE: VIA.B) as the Bull of the Day and Eli Lilly (NYSE: LLY) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Wells Fargo (NYSE: WFC), Bank of America (NYSE: BAC) and Ford Motor Co. (NYSE: F).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.

Here is a synopsis of all five stocks:

Bull of the Day:

We upgrade our recommendation for Viacom (NYSE: VIA.B) to Outperform ahead of its first quarter 2010 financial results.

An improving economic outlook, together with Viacom's disciplined management team, highly complementary mix of assets, and a healthy financial position, keep us optimistic about the company's future growth prospects. The company is likely to benefit from rising sales of its Paramount movies and an improving advertising market.

The stock is currently trading at significantly low multiples with respect to several valuation metrics compared to its peers, which we believe does not adequately reflect the true growth potential of the company. Viacom enjoys strong brand value with respect to several TV channels.

Bear of the Day:

Eli Lilly (NYSE: LLY) reported first quarter earnings of $1.18 per share, a couple of cents below the year-ago earnings, but above the Zacks Consensus Estimate of $1.11. Revenues increased 9% year-over-year mainly due to robust performances by Cymbalta, Alimta, Cialis and the Animal Health business.

While strong sales from key products such as Cymbalta, Cialis, the diabetes business and Alimta will be the fundamental strength to revenue growth in 2010, we remain concerned about the patent cliff being faced by Lilly. We expect the top-and bottom-line to come under pressure from late 2011 with the loss of exclusivity on Zyprexa. Barring significant cost-cutting efforts or additional revenue catalysts, 2013 will be the beginning of a very challenging period, with Cymbalta losing US patent protection during the year.

We do not believe the short-term catalysts will translate into sustainable long-term growth until the pipeline significantly improves. As such, we downgrade the stock to Underperform with a $32 target price.

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Housing Prices Mixed

Among the hard-hit-but-recovering areas are the three Californian cities tracked. San Francisco, Los Angeles and San Diego are all down by between 35.9% and 37.2% from the peak, well above the composite numbers, but they have staged some of the most impressive rebounds. On a year-over-year basis, SF has seen prices rebound by 12.1%, while SD is up 7.6% and LA is up 5.4%. All three were also up on a month-to-month basis.

The other early poster children for the housing bust have not fared as well. Las Vegas continues to be the hardest hit, down 55.7% from the peak, and it is also down more than any other city on a year-over-year basis, off 14.6%. However, it might have a little spark of life in it, since prices actually rose slightly (0.14%) on a month-to-month basis. Phoenix also continues to slide (and not yet live up to its name), off 51.0% from the peak and down 1.58% year over year, and down 0.42% for the month.

The two Florida cities tracked, Miami and Tampa, also continue to struggle, down 47.4% and 42.2% from the peak and down 4.4% and 6.0% over the last year -- and still falling on a month-to-month basis, by 0.26% and 0.31% respectively.

On the other hand, Dallas, which has held up better than any other city from the peak, posted the one of the worst month-to-month performances, with a decline of 1.39%, but it is still up 2.71% year over year and is down just 4.1% from the peak. Denver shows a similar pattern, up 3.7% year over year, and just off 8.2% from the peak, but slipping slightly (0.18%) for the month.

The Pacific Northwest representatives in the sample, Seattle and Portland, held up very well in the early going but seem to be catching up with the rest of the country. Portland’s month-to-month decline was even worse than that of Dallas with a 1.87% decline, while Seattle was down 0.78 on the month. Year over year, Seattle is down 5.9% and Portland is down 4.7%, while from the peak they are still down slightly more than half as much as the overall composites at 16.3% and 16.5%, respectively.

I suppose this does go to show that, as the realtors like to say, every market is different, and that past performance -- even in housing -- is no guarantee of future returns. The rebound in California is interesting given that state’s well-publicized budget woes and the resulting probability that taxes there are likely to rise while services are likely to be cut. It is also very good news for the banks that have heavy exposure to California, such as Wells Fargo (NYSE: WFC) and Bank of America (NYSE: BAC).

Ford Revs, Shares Downshift

Ford Motor Co. (NYSE: F) has revealed a profit of $1.76 billion or 46 cents per share (before special items including sales of Volvo cars) in the first quarter of 2010, outperforming the Zacks Consensus Estimate of 31 cents per share. The profit showed a $3.55 billion improvement from a loss of $1.79 billion or 75 cents per share (before special items including sales of Volvo cars) in the first quarter of 2009.

Sales in the quarter escalated 15% to $28.1 billion. Excluding sales of Volvo cars in 2009, sales increased more than 30%. The improvement in results was attributable to strong sales of new products, betterment in global Automotive operations and higher profits at Ford Credit.

Ford Automotive recorded a 21% rise in revenues to $25.4 billion. The pre-tax operating profit was $1.2 billion in contrast to a loss of $2 billion a year ago. The improvement reflected favorable net pricing, higher volume and mix.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

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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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