Zacks Analyst Blog Highlights: UDR, ArvinMeritor and TRW.

CHICAGO -- 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: UDR, Inc. (NYSE: UDR), ArvinMeritor (NYSE: ARM)

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

Here are highlights from Thursday's Analyst Blog:

Attractive Valuation for UDR

Operationally, UDR, Inc. (NYSE: UDR) had a strong 2nd quarter, with solid increases in revenue, net operating income (NOI) and income per occupied home. While occupancies slightly declined, rental rates are increasing at a healthy pace. Second quarter funds from operations (FFO) missed our estimate by $0.02 per share. The stock has dropped some 30% over the past six months due to a sector-wide sell-off.

Backed by solid fundamentals and what we expect will be another good year for apartment real estate investment trusts (REITs), UDR's valuation remains attractive compared to its peers. At 12.8x 2007 FFO estimates, UDR still trades at a discount to its peer group; a 30% discount to the weighted average multiple of multi-family REITs in our coverage universe.

Due to a general sell-off in the sector, shares of UDR have dropped about 20% over the past six months. The company has assets located in many secondary and lower barrier markets, which do not have the potential for long-term consistent growth although UDR continues to post same-store revenue and NOI results in line with its peers.

Target for ArvinMeritor Lowered

The commercial vehicle market is strong, with all major markets being up in the double-digit range. At present, ArvinMeritor (NYSE: ARM) is undergoing dramatic cost reductions as well as implementing an impressive global growth strategy. Also, the company is expanding geographically and outsourcing to low-cost countries. Costs are being cut to the tune of $75MM in 2008 and $75MM more in 2009.

Growth has been slowing, as truck tonnage is declining over the last 3.5 years. European production is surging, and prices are increasing along with increased capacity during the last 12 months as well as a guaranteed increase in volumes. Raw material sourcing is improving. This is the key to cost cutting.

The product line is also being widened. Ride Control production is being moved to Mexico and there is a joint venture with TRW (NYSE: TRW) to distribute products in Europe. Moreover, the reduced 2007 outlook leads us to lower our six-month target price to $17.00, which is based on 11.3x our 2008 EPS estimate of $1.50. We maintain our Hold rating on the shares of ARM.

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

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