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: DaimlerChrysler (NYSE: DCX), Toyota (NYSE: TM), Sallie Mae (NYSE: SLM) and Kenexa Corporation (Nasdaq: KNXA).

See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673

Here are highlights from Thursday’s Analyst Blog:

DaimlerChrysler Stays a Hold

On February 14, 2007, DaimlerChrysler (NYSE: DCX) announced a restructuring that will lead to 13,000 layoffs. 16% of the U.S. division’s workforce will be reduced, with a goal to get Chrysler to profitability in 2008. The plan calls for closing the company's Newark, DE assembly plant, and reducing shifts at plants in Warren, MI and St. Louis. A parts distribution center near Cleveland also will be closed.

DCX has introduced a new business model which is expected to improve the company’s competitiveness and profitability in the long-term. The new plan will reduce the redundancies, focus on core processes, and encourage internal collaboration. Under the new business plan, the company expects to achieve cost efficiencies through headcount reduction and consolidation of general & administrative (G&A) functions. The G&A costs are expected to be reduced by $1.8 billion (€1.5 billion) per year.

However, the Chrysler Group continues to face an intensely competitive environment. Moreover, profitability issues persist in this segment, despite a relatively strong schedule of product launches. New offerings from BMW, Nissan, and Toyota (NYSE: TM) may erode DaimlerChrysler’s market share. Market share has eroded 60 basis points over the past year.

Headwinds for Sallie Mae?

We are reiterating our Hold rating on shares of SLM Corp. (NYSE: SLM), or Sallie Mae, while decreasing our price target sharply after weak Q4 results and a deterioration in the legislative environment. Diluted EPS [earnings per share] was $0.02 short of our estimate and $0.01 below consensus. Most of the negative variance came from a spike in NCOs [net charge-offs], leading to a significantly higher provision than estimated. Our estimates are falling, based largely on revised credit assumptions.

Perhaps more importantly, SLM now seems to face challenges both from a Democrat-led Congress and from the Bush administration’s proposed budget cuts. We have not explicitly forecast any changes due to such activities, but we see this as a potential headwind for an extended period.

Acquisitions Pay Off for Kenexa

Kenexa Corporation (Nasdaq: KNXA) is well-positioned in the growing talent acquisition and employee performance management market. The acquisition of Webhire and Knowledge Workers are paying off with increased customer signings in the Healthcare and Government verticals. Moreover, the November acquisition of BrassRing has already helped the company sign deals with global enterprises that would have otherwise been out of its reach. We therefore maintain our Buy recommendation on the stock, and raise our six-month target price to $45.00.

In the rapidly growing talent management sector, Kenexa is well-positioned with its Web-based applications that automate human resources activities such as recruitment, skills testing and tracking of employee development. We believe the company offers a differentiated service with its integrated talent acquisition, employee performance management, and employment process outsourcing services, while most of its competitors focus either on services or software but not both.

See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645

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