Zacks Bull and Bear of the Day Highlights: Avon Products, Amazon.com, Amdocs and Del Monte

CHICAGO--(BUSINESS WIRE)--Zacks Equity Research highlights Avon Products (NYSE: AVP) as the Bull of the Day and Amazon.com (Nasdaq: AMZN) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Amdocs (NYSE: DOX) and Del Monte (NYSE: DLM). Full analysis of all four stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all four stocks:

Bull of the Day:

Our Bull of the Day recommendation is for Avon Products (NYSE: AVP). CEO Andrea Jung has transformed Avon Products over the last seven years. The company has grown aggressively in the Beauty products category, especially overseas in developing markets. Management has instilled financial discipline in the company through the multi-year supply chain cost reduction program and the recently announced Product Line Simplification and Strategic Sourcing initiatives. The deceleration of sales growth in China in 2005 drove the stock to a historically low P/E (below 15). With the outlook stabilizing in China, the stock has become attractive and is rated a Buy.

Bear of the Day:

Our Bear of the Day recommendation is for Amazon.com (Nasdaq: AMZN). We reiterate our Sell rating on AMZN shares and our target price of $20, which is a generous 31 times our 2007 EPS estimate. Amazon’s sales, while still solid, continue to be less profitable each quarter, and that is a recipe for a lower stock price. We believe the company’s deteriorating profit margins point to a weaker fundamental picture and earnings disappointments in future quarters. Moreover, the stock trades at a rich valuation of 58.3 times our 2007 EPS estimate, which is simply not warranted.

Analyst Blog:

We maintain our Buy recommendation for Amdocs (NYSE: DOX), a leading provider of CRM and billing software to telecom carriers. The company’s first quarter fiscal 2007 earnings results (ended December) were in-line with our estimates. Demand for customer care software remains strong as carriers started mainstream selling of bundled IP-based solutions. DOX has established its leadership position in the digital-content market as well as in the operating Support System market for the carrier segment. Management has reduced its fiscal 2007 financial guidance in anticipation of a slowdown in orders from some large carriers in the U.S. and Europe. But we believe this is a temporary setback, and demand is expected to resume in the third quarter once carriers implement large transformation projects to provide further converged and consolidated network solutions.

Del Monte’s (NYSE: DLM) management states that it is focused on improving shareholder value through a brand-driven strategic plan. Despite management’s belief that the Transformation Plan will enhance execution and overall competitiveness, the expected earnings dilution from the acquisitions of Milk-Bone and Meow Holdings is constraining earnings progress. EPS have been and are expected to remain in the $0.67 to $0.89 range. In addition, margins are expected to remain under pressure from high ingredient (fish), steel, energy, logistics, and other transportation-related costs. The recent decline in the stock discounts most of the current developments, however; therefore, the stock is now rated a Hold.

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

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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Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

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