Zacks Bull and Bear of the Day Highlights: Stryker Corp., U.S. BioEnergy, Xtent and Logitech.

CHICAGO -- Zacks Equity Research highlights Stryker Corp. (NYSE: SYK) as the Bull of the Day and U.S. BioEnergy (Nasdaq: USBE) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Xtent (Nasdaq: XTNT) and Logitech (Nasdaq: LOGI). 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 Stryker Corp. (NYSE: SYK). The company reported in-line EPS [earnings per share] on better revenues as in SG&A [sales, general & administrative] and R&D [research & development] hold back operating margin. The company is building cash and marketable securities ($1.5 billion) and continues to look for additive deals. A larger deal is possible, although the company may use cash for stock repurchases if attractive deals don't materialize. Given the quarter revenue upside, we are increasing our 2007 and 2008 revenue estimates and increasing our 2008 EPS estimate to reflect slightly better margins. Our $74.00 target is based roughly on a 1.3x P/E/G [price-to-earnings growth], in-line with the group average, or roughly 26x our 2008 earnings per share estimate. We reiterate our Buy recommendation.

Bear of the Day:

Our Bear of the Day recommendation is for U.S. BioEnergy (Nasdaq: USBE). The company produces corn-based ethanol and its co-product, distillers' grains. While USBE has very favorable near-term growth prospects due to its rapid capacity expansion, we have a negative outlook on the long-term future of the industry as a whole. Namely, there are very few barriers to entry and producers are subject to corn, natural gas, and oil price fluctuations. Further, recent corn price increases have caused us to lower our forward EPS estimates significantly. For the full year, we now expect EPS of $0.48.

Analyst Blog:

Xtent's (Nasdaq: XTNT) proprietary Custom NX drug eluting stent system has the potential to correct or mitigate some of the current concerns surrounding the drug eluting stent (DES) market. Since we do not expect any commercial revenues until the second half of 2008 (2010 in the U.S.), we believe the stock will be driven in the near term by several clinical and regulatory events that confirm the clinical and commercial potential of the Custom NX system. However, the company is reliant on Biosensors for regulatory approval of the stent coating and any regulatory delays will affect our outlook. We initiate coverage on the stock with a Hold rating, as well as a price target of $12 per share.

Logitech (Nasdaq: LOGI) reported a mixed first quarter, with revenues below our estimates but earnings in-line with our expectations. This was impressive given the unexpected decline in webcam sales experienced in Europe during the quarter, which hindered growth, but the company was still able to improve its gross margin due to a more-favorable product mix. While we were disappointed with the weak webcam sales, we were surprised by the continued strength in the rest of the company's product portfolio, which was up 19% year over year, excluding the video business. We continue to rate shares of LOGI a Buy, with a price target of $33.75.

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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