Zacks Equity Research Highlights Stocks for Bull and Bear of the Day

Zacks Equity Research, a renowned provider of quantitative and qualitative analysis, has selected Linear Technology (LLTC) as the Bull of the Day and Merck & Co., Inc. (MRK) as the Bear of the Day. The company also provides analysis on eBay (EBAY) and Genzyme Corporation (GENZ), highlighting their potential for growth and decline in the market.

Linear Technology, a leading OEM of analog and mixed signal semiconductors, has delivered March quarter results in line with consensus expectations. The company's forward revenue guidance indicates 5% sequential growth, driven by increased bookings and accelerating turns. With the semiconductor industry entering a new up-cycle, Zacks Equity Research believes that Linear Technology has the potential to deliver results exceeding consensus expectations in the June quarter. The company's valuation is considered cheap, and there is room for further share price appreciation.

On the other hand, Merck & Co., Inc. is selected as the Bear of the Day, with Zacks Equity Research continuing to recommend investors sell the stock. The company's mounting legal liabilities, coupled with declining sales of key drugs and an underwhelming drug pipeline, limit its upside potential. With a dozen or so Vioxx trials expected to reach a verdict in the second quarter, Zacks Equity Research advises investors to avoid Merck through the summer.

eBay, on the other hand, delivered a solid report in the first quarter, but disappointed investors with its conservative outlook for the rest of 2006. Despite this, the company's valuation looks attractive, and Zacks Equity Research views it as a solid long-term holding due to its powerful business model and smart growth strategy.

Genzyme Corporation is a biotechnology company that focuses on developing and marketing therapeutic products, including key products such as Thyrogen and Synvisc. While the launch of Myozyme in 2006 will support growth, the maturation of other key products like Cerezyme and Renagel will restrict future margin expansion. As a result, Zacks Equity Research rates the stock a 'Hold' with a price target of $67.

Key Takeaways:

• Linear Technology's forward revenue guidance indicates 5% sequential growth, driven by increased bookings and accelerating turns.
• The semiconductor industry is entering a new up-cycle, which should have a positive effect on Linear Technology's performance.
• Merck & Co., Inc.'s mounting legal liabilities, declining sales of key drugs, and underwhelming drug pipeline limit its upside potential.
• eBay's valuation looks attractive, and the company is a solid long-term holding due to its powerful business model and smart growth strategy.
• Genzyme Corporation's key products, such as Thyrogen and Synvisc, are expected to support growth, but the maturation of other key products will restrict future margin expansion.
• Zacks Equity Research recommends investors sell Merck through the summer due to the expected Vioxx trial verdicts.

Statistics:

• Linear Technology's forward revenue guidance: 5% sequential growth.
• Merck & Co., Inc.'s 2008 sales decline: 2008.
• eBay's price target: $47.
• Genzyme Corporation's price target: $67.
• Merck & Co., Inc.'s stock price: $30 (based on 2006 multiple of 12.5x).

Sources:

• Zacks Equity Research, "Bull of the Day: Linear Technology", March 2006.
• Zacks Equity Research, "Bear of the Day: Merck & Co., Inc.", March 2006.
• Zacks Equity Research, "eBay (Nasdaq:EBAY)", March 2006.
• Zacks Equity Research, "Genzyme Corporation (Nasdaq:GENZ)", March 2006.
• Zacks Investment Research, "About Zacks Equity Research", March 2006.
• Zacks Investment Research, "About the Bull and Bear of the Day", March 2006.
• Zacks Investment Research, "About the Analyst Blog", March 2006.