Zacks Analyst Blog Highlights: CNOOC, Playtex Products, Proctor & Gamble and Johnson & Johnson.

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: CNOOC, Ltd. (NYSE: CEO), Playtex Products (NYSE:

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

Here are highlights from Tuesday's Analyst Blog:

$100 Price Target on CNOOC

CNOOC, Ltd. (NYSE: CEO) has reported positive results in recent quarters, primarily due to high oil prices and increased production. The company continues to achieve steady growth in oil and gas production and reserves. Although there are concerns related to the volatility in global oil prices, higher operating costs, and regulatory changes, we think that the company's current valuation does not fairly reflect its positive production growth profile and leverage to the Chinese natural gas market. Therefore, we maintain our Buy rating on the stock.

The company's ability to enter into production sharing contracts (PSC) allow it to acquire, at no cost, a participating interest of up to 51% in any offshore China discovery by a foreign company. This arrangement has not only helped the company to strengthen its resource base, but also enabled it over the years to develop the technical and management expertise to independently conduct operations on other projects. This is reflected in the company's diversified mix of both independent and PSC projects.

Playtex Considered Overvalued

Management at Playtex Products (NYSE: PYX) is investing in product innovations to enhance market share and top-line performance. However, Playtex competes against companies with large resources, such as Proctor & Gamble (NYSE: PG) and Johnson & Johnson (NYSE: JNJ); hence, investments in marketing and a heavy debt burden restrain profit growth.

In February 2006, management reduced long-term growth targets for sales and operating income. Despite the recent acquisition of a large position in Playtex by Harbert Management, the high valuation level compels us to maintain a Sell recommendation.

The competitive environment has intensified, as major competitors have shifted focus from cost-cutting to driving market share gains through increased advertising and new product introductions. Despite the implementation of a continuing restructuring program, rising raw material costs are pressuring margins. Higher raw material and freight costs negatively impacted gross margin by 75 basis points in 2006. Management believes commodity cost pressures will continue during the year. Like most personal products companies, the company is vulnerable to volatile raw material and packaging costs.

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

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