Zacks Bull & Bear of the Day Highlights: Boston Scientific, BJ’s Restaurants, Wal-Mart, Abercrombie and Aeropostale

Zacks Equity Research picks Boston Scientific Corp. (NYSE: BSX) as Bull of the Day and BJ’s Restaurants, Inc. (Nasdaq: BJRI) as Bear of the Day. In addition, the analysts at Zacks Equity Research discuss the latest on Wal-Mart (NYSE: WMT), Abercrombie (NYSE: ANF) and Aeropostale (NYSE: ARO).

Full analysis of all these stocks is available at: http://at.zacks.com/?id=2678

Bull of the Day

Boston Scientific Corp. (NYSE: BSX) competes in the cardiovascular, endosurgery and neuromodulation markets. All three segments are experiencing strong sales growth and should remain relatively insulated from the current economic crisis.

BSX has historically grown through acquisition, which has led to earnings-quality concerns. Recent positive news on stents will bode well. Trial results for Abbott’s XIENCE stent, which BSX markets under a private label, were positive. BSX launched its TAXUS Liberte.

Steps taken to reduce financial risks have led to improved credit ratings. The company is maintaining strong global market share, boosted by Taxus Liberte results in Japan. We reiterate our Buy.

Bear of the Day

BJ’s Restaurants, Inc. (Nasdaq: BJRI) has grown rapidly with its unique concept and high-quality food offered at various price points, while maintaining some of the best unit economics in the industry. Despite the recession, the chain’s current comps are outperforming its peer group.

However, trading at a premium to its growth rate (28x 2010E), we believe BJRI shares are richly priced given the uncertainty in the economy and estimates. Longer-term, we think the company’s 20%+ unit growth target could become unmanageable as the base expands, or difficult to fund.

Since 2002, BJ’s ROE has averaged in the mid-single digits, with full-year results rising above 6% only once, when it reached 8% in 2005.

Recent Analysis from the Analyst Blog

Retail Sales Better than Expected

April retail sales were better than expected, with about 60% of retailers beating forecasts. That is an improvement from March, when about half of the retailers beat forecasts.

Our sample of 20 retailers reported that April sales increased 1.7%, including Wal-Mart (NYSE: WMT), but decreased 2.6% excluding Wal-Mart. Among those retailers beating forecasts were Wal-Mart, up 4% vs. expectations of up 3%, Abercrombie (NYSE: ANF), down 22% vs. down 28%, and Aeropostale (NYSE: ARO), up 20% vs. up 9%.

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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.

About the Analyst Blog

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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