Zacks Analyst Blog Highlights: Tractor Supply, GameStop, PetMed Express, Inc., XTO Energy, Inc. and Agrium 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: Tractor Supply (NASDAQ: TSCO), GameStop (NYSE: GME), PetMed Express, Inc. (NASDAQ: PETS), XTO Energy, Inc. (NYSE: XTO) and Agrium Inc. (NYSE: AGU).

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Here are highlights from Friday’s Analyst Blog:

Tractor Supply Downed to Sell

We are downgrading Tractor Supply (NASDAQ: TSCO) shares from Hold to Sell and lowering our target price from $36 to $25. While Tractor Supply's business held up fairly well in 2008, it will have a more difficult go of it in 2009.

In our view, the consumer spending environment will worsen in 2009, as economic growth slows and unemployment rises. What's more, the company will begin to go up against difficult comparisons in the second quarter of 2009.

GameStop Moves Ahead

Nice move today in GameStop (NYSE: GME) shares, up over 11% as I’m writing this. The company reported robust sales for the 9-week holiday season ending January 3.

Comp-store sales increased 10.2% and total sales spiked 22.3% over the year-ago period. Management also boosted its fourth quarter earnings per share from $1.29-$1.34 to $1.31-$1.34.

PetMed Express Impresses

PetMed Express, Inc. (NASDAQ: PETS) based in Pompano Beach, Florida, is a leading nationwide pet pharmacy. The company’s sales trends remain strong, despite the difficult economic environment. What’s more, a healthy repeat customer business has allowed management to cut operating expenses without hurting its overall sales growth. As a result, PetMed has posted impressive profit margin gains.

Going forward, we expect these sales trends to continue. We think the company can increase its operating profit margin to 15.4% in 2009 and 15.8% in 2010, up from 13.7% in fiscal 2007. All told, we rate PetMed Express a Buy with six-month target price of $21, which is about 190x our fiscal 2010 EPS estimate.

XTO Energy Still Energized

Despite numerous challenges, XTO Energy, Inc. (NYSE: XTO) remains well-positioned to provide another record performance in 2009 on the back of its impressive portfolio of producing assets and industry-leading cost metrics.

The company intends to generate free cash flow of roughly $2 billion for the year, of which at least $1.25 billion will go towards debt reduction. Also, having already locked in nearly 80% of 2009 production at very attractive prices, the company has smoothed out the commodity-price risk. As such, we are maintaining our Buy recommendation on XTO shares. While shares of E&P companies have bounced back some in recent days (our coverage universe is up 16.5% in the last four weeks vs. a gain of 5.2% for the S&P 500), they still remain significantly below the late summer 2008 levels.

Agrium a True "Growth" Story

Agrium Inc. (NYSE: AGU), based in Alberta, Canada, is a major retailer of agricultural products and services in North and South America, a leading global wholesale producer and marketer of all three major agricultural macronutrients such as nitrogen, potash, and phosphate, and a premier supplier of micronutrients and specialty fertilizers.

Agrium is growing through acquisition and organic expansion. The acquisition of United Agri-Products is driving revenues and profits supported by an expanded product line in the major business segment. However, the company is witnessing weak demand and prices for its fertilizers.

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