Zacks Analyst Blog Highlights: Petroleo Brasileiro SA, Charlotte Russe Holding, Allion Healthcare Inc., Gafisa SA and Shaw Communications 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: Petroleo Brasileiro SA (NYSE: PBR), Charlotte Russe Holding (Nasdaq: CHIC), Allion Healthcare Inc. (Nasdaq: ALLI), Gafisa SA (NYSE: GFA) and Shaw Communications Inc. (NYSE: SJR).

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Here are highlights from Friday’s Analyst Blog:

Petrobras Downgraded to Hold

We are changing our recommendation on Petroleo Brasileiro SA, or Petrobras (NYSE: PBR) ADRs from Buy to Hold. We like Petrobras for its positive production-growth profile and the improving outlook for its downstream business. For the near future, we are concerned with the effects of higher costs and lower oil prices.

Moreover, the discovery of the giant Tupi field opens up a new range of possibilities for the company in the long run. Third quarter 2008 results were better than expected thanks to the depreciation of the real and high oil prices. Total oil and gas production reached 2,437 million oil-equivalent barrels per day, from 2,389 million in the previous quarter and 2,309 million in the same period of 2007. However, we were disappointed by higher costs during the quarter.

CHIC Upped on Buyout News

Charlotte Russe Holding (Nasdaq: CHIC) reported weaker-than-expected results for its fiscal fourth quarter and the company's first quarter EPS guidance was below the market's expectations.

More important, however, was that the company received an unsolicited takeover bid from private equity firms KarpReilly and H.I.G. Capital. The all-cash deal is priced at $9.00 to $9.50 per share, or about $200 million. That is in-line with Charlotte Russe's book value of $9.20 share and about 35% above its November 11 closing price.

Allion Healthcare in the Pink

Allion Healthcare Inc. (Nasdaq: ALLI) is a national provider of specialty pharmacy and disease management services focused on HIV/AIDS patients.

ALLI reported better-than-expected 3Q08 net income of $2.9M, or EPS of $0.12, compared with net income of $1M and EPS of $0.06 in 3Q07. Adjusted EBITDA in 3Q08 was $7.7M versus $2.3M in 3Q07, and $7.3M in 2Q08, and reflects the contribution from the Biomed acquisition, lower legal expenses and organic growth in the Specialty HIV business.

Gafisa Slowing Brazil Buildout

Gafisa S.A. (NYSE: GFA) is one of the largest builders and incorporators of Brazil. We are reiterating our Hold recommendation on the company.

Third quarter 2008 results were positive. We expect reasonable results for the medium-to-long term based on the announcement made by Caixa Economica Federal, a state-owned savings bank. The bank expects to increase credit and buy stocks in the construction sector to help the industry make it through the crisis. Moreover, the recent joint venture with Tenda will enhance the company's presence in the low income segment, which is also an asset for the company.

Shaw Comm: Hold Canadian Cable

The Cable Division (77% of 2008 revenue) comprises Shaw Communications Inc. (NYSE: SJR) cable television, Internet, digital phone and Shaw Business Solutions. Shaw is the largest cable television provider in Western Canada with 2.2 million cable television customers in five provinces (British Columbia, Alberta, Saskatchewan, Manitoba and northwestern Ontario).

We assumed coverage of Shaw Communications in February 2007. We think SJR can grow EPS at a CAGR [compound annual growth rate] of at least 15-17% over the next five years, driven by the acquisition of cable systems, the rollout of digital telephony and the country's fastest Internet service, coupled with continuing share buybacks. Moreover, continued share buybacks, funded by free cash flow and the increased dividend, will boost total shareholder return.

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