Zacks Bull and Bear of the Day Highlights: Valspar Corporation, Cadence Design Systems, Saks, Family Dollar and Wal-Mart

Zacks Equity Research highlights Valspar Corporation (NYSE: VAL) as the Bull of the Day and Cadence Design Systems (Nasdaq: CDNS) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Saks (NYSE: SKS), Family Dollar (NYSE: FDO) and Wal-Mart (NYSE: WMT).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day:

We are upgrading Valspar Corporation (NYSE: VAL) shares to Outperform with a target price of $32.00. The company's solid results and robust margin gains over the past few quarters reflect the dramatic raw material cost reduction, increasing product prices and productivity gains.

We expect the company's earnings momentum to remain in place over the next few quarters driven by volume increases in the Paint category. Robust growth in China industrial and consumer activity as well as structural and feedstock cost relief are expected to fuel margin expansion for Coating.

Not only were Valspar's recent quarterly earnings ahead of the Zacks Consensus Estimate, but the company has also raised guidance for the rest of the year.

Bear of the Day:

Cadence Design Systems (Nasdaq: CDNS) reported weak results for the second quarter, and blamed the shortfall on softness in EDA spending. We expect that a turnaround is going to take time due to mounting financial problems leading to a lackluster growth.

3Q and 2009 guidance was not encouraging. Although Cadence is offering new products and taking cost-cutting measures, we are not confident in the company's ability to grow and show healthy fundamentals over the near term. Cadence also withdrew its bid for Mentor Graphics in 2008, further dimming its growth prospects.

Cadence recently came out with enhanced versions of its products, but it will take time for these to generate additional revenue. 2011 estimates have been added. We maintain an Underperform rating on the shares a six-month price target of $4.50.

Latest Posts on the Zacks Analyst Blog:

Initial Jobless Claims Fall

While the total number of people getting unemployment benefits is down, it is down by only 4,000, not the 72,000 that most of the financial press will report. The extended benefits do not last forever, and by the end of the year, 1.5 million people are scheduled to lose even those extended benefits, which will leave them with no income at all. The House has passed a 13-week extension for people who live in states with an unemployment rate of over 8.5%, but the Senate has yet to act on this matter.

So, do you think that in those households this Christmas is going to be one dominated by Santa or the Grinch? My bet is it will be pretty Grinchy. That means that people will not be going out to the malls and spending a lot of money at Saks (NYSE: SKS). The discounters like Family Dollar (NYSE: FDO) and Wal-Mart (NYSE: WMT) might do OK as former high-end shoppers trade down, but the mall anchors and the higher end specialty stores are likely to face a very bleak and dreary Christmas season this year.

This will be the second weak holiday season in a row, so they will have relatively easy comps -- but even so, with unemployment still rising and those who are out of work being out of work for unheard of lengths of time, it is hard to see how people will open up their wallets very wide. Who knows, Christmas might even turn back into a predominately religious holiday…

Nah, that will never happen.

Get the full analysis of all these 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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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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