Zacks Analyst Blog Highlights: PartnerRe Ltd, Zimmer Holdings, The Corporate Executive Board, H. J. Heinz Company and Starwood Hotels & Resorts Worldwide Inc.

CHICAGO--(BUSINESS WIRE)--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: PartnerRe Ltd (NYSE: PRE), Zimmer Holdings (NYSE: ZMH), The Corporate Executive Board (NASDAQ: EXBD), H. J. Heinz Company (NYSE: HNZ) and Starwood Hotels & Resorts Worldwide Inc.’s (NYSE: HOT).

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Here are highlights from Monday’s Analyst Blog:

PartnerRe Adjusted, Still a Buy

PartnerRe Ltd’s (NYSE: PRE) 3Q08 operating income of $121.3 million or $2.27 per diluted share was ahead of estimates. While the core results were strong, the company suffered substantial losses in the investment portfolio and large hurricane losses.

Based on 3Q08 results, we are moderating our FY08 and FY09 estimates to $10.39 per share and $9.55 per share respectively. At the current price, the shares of PRE trade at 0.85x its 3Q08 book value of $65.38 per share, almost at the bottom of its 10-year range, substantially below the peak of 1.73x and at a 11.8% premium to the peer group median.

Zimmer Valuation Lowered

Zimmer Holdings (NYSE: ZMH) is a global leader in the design, development, manufacture, and marketing of reconstructive implants, and trauma and related orthopedic surgical products.

We believe the increase in unemployment will reduce the number of insured patients. As a result, procedures may be subject to delays, reducing revenue growth in the near-term. On the upcoming call, we are listening for whether the stronger dollar will reverse the tailwind revenues have received over the past few years, if efforts to increase financial leverage during the recent credit crisis may have met obstacles, and if efforts to control prices of commodity inputs (futures) may pressure gross margins as prices have since retreated.

Corporate Executive Board a Sell

We maintain our Sell rating on shares of The Corporate Executive Board (NASDAQ: EXBD) following the release of third-quarter results.

We believe the shares of The Corporate Executive Board are overvalued near current levels, in light of the weak conditions in the current operating environment. Although Q3 results came in ahead of expectations, we have reduced our fourth-quarter 2008 and full-year 2009 EPS estimates as the company’s outlook remains modest, in part due to the fact that EXBD has yet to improve its cross-sell ratio.

Heinz Looking to Play Catch-Up

Growth in the domestic businesses, strengthening international operations and the reallocation of resources in favor of key brands are the major positive trends for the H. J. Heinz Company (NYSE: HNZ). However, the gross margin is declining due to higher commodity costs. Despite cost pressure, strong pricing of 3.5% to 4.5% has allowed the company to report positive earnings surprises in the last nine quarters.

Management expects net sales to increase in the 6% range in fiscal 2009, driven by new product introductions and positive pricing. However, since the stock is only in the middle of its historical valuation range, the Hold recommendation is maintained.

Starwood Hotels No Longer So Hot

We continue to believe that Starwood Hotels & Resorts Worldwide Inc.’s (NYSE: HOT) well-positioned portfolio will benefit given an increase in demand. However, we currently do not expect an improvement in the operating environment in the near term, and we expect that challenges will persist through 2009. Therefore, we have downgraded our rating on shares from Buy to Hold. Our price target of $20 reflects an enterprise value/EBITDA multiple of 7.0x our 2009 EBITDA estimate.

While the slowing economy has been evident for some time, we had previously expected Starwood to outperform its peers in part due to its concentration in high-end properties, its international exposure, and its relatively limited timeshare business. Although third-quarter results exceeded our expectation, a portion of the upside was due to timing. Also, management’s outlook regarding the fourth quarter and 2009 make clear the fact that the economic factors will hurt Starwood more than we had originally anticipated.

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