Zacks Analyst Blog Highlights: Salesforce.com Inc., Entergy Co., School Specialty, Inc., Citigroup, Inc. and TAM S.A.

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: Salesforce.com Inc. (NYSE: CRM), Entergy Corp. (NYSE: ETR), School Specialty, Inc. (Nasdaq: SCHS), Citigroup, Inc. (NYSE: C) and TAM S.A. (NYSE: TAM).

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Here are highlights from Monday’s Analyst Blog:

Salesforce.com for the Long-Term

Salesforce.com Inc. (NYSE: CRM) is the market leader in the on-demand Customer Relationship Management (CRM) space and continues to see substantial subscriber and customer growth.

Although the company reported strong results year-to-date, dilution from the InStranet acquisition will lower EPS for fiscal 2009. Though this may penalize the stock, we believe InStranet makes strategic sense, and over the long-term EPS growth will accelerate. We therefore reiterate our Buy rating on Salesforce.com’s shares with our six-month price target of $45.

Entergy Making the Right Moves

New Orleans-based Entergy Corporation (NYSE: ETR) is primarily engaged in electric power production and retail distribution operations. With 30,000 MW of generating capacity, it distributes electricity to 2.6 million customers in Arkansas, Louisiana, Mississippi and Texas.

ETR is shifting towards becoming a fundamentally strong electric energy utility with the separation of its nuclear business. Higher nuclear power prices, lower taxes and O&M expenses, ongoing share repurchases, a reasonable valuation and steady recovery from the hurricane Gustav and Ike damage will continue to deliver strong earnings and cash flow growth.

School Specialty Lowered to Sell

School Specialty, Inc. (Nasdaq: SCHS) reported disappointing results for its fiscal second quarter, and management lowered its guidance for the fiscal year 2009. The company earned $1.76 per share, which was well below our estimate of $1.92.

The shortfall was due to a decline in state revenue. SCHS is highly dependent on its state and local government for its revenues. A slowing economy and de-leveraging in the credit markets will only exacerbate the problems in government funding. We expect this trend to continue, and that will hurt School Specialty’s results. As a result, we are lowering our fiscal 2009 and fiscal 2010 estimates to reflect a reduction in state spending.

Citi: Another Bad Deal for Taxpayers

Over the weekend, the government decided to guarantee over $300 billion in Citigroup, Inc. (NYSE: C) assets — and let me assure you that those are the most worthless assets on C’s books — for up to 10 years in the case of residential backed assets and five years for non residential backed assets. Citi is on the hook for the first $29 billion, and after that the government absorbs 90% of the losses.

In return, the government gets $7 billion of preferred stock which pays 8%, and gets warrants for $2.7 billion of common stock. However, the strike price on the warrants is so high that Citigroup’s stock price has to rise 281% from Friday’s close before they are in the money.

TAM Airline Grounded for Now

TAM S.A. (NYSE: TAM) is a Brazilian airline company incorporated more than 30 years ago and through its subsidiaries TAM Linhas Aéreas and TAM Mercosur has been providing air transportation services in both the domestic and the international markets. TAM is a leading airline in the domestic market, with a 49.3% market share as of June 30, 2008 in RPKs (revenue passenger kilometer) according to data from the Brazilian National Civil Aviation Agency (ANAC).

We are maintaining our Hold recommendation on TAM S.A. Although the company posted positive operating figures for the third quarter 2008, net income was highly disappointing. TAM reported a net loss of US$285.8 million due to the net financial loss during the quarter.

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