Zacks Analyst Blog Highlights: Waste Management, Becton, Dickinson and Company, Waste Systems, Republic Services and Telefonica

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Apr 15, 2011, 09:30 ET

CHICAGO, April 15, 2011 /PRNewswire/ -- 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: Waste Management Inc. (NYSE: WM), Becton, Dickinson and Company (NYSE: BDX), Waste Systems Inc. (Nasdaq: CWST), Republic Services Inc. (NYSE: RSG) and Telefonica (NYSE: TEF).

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Here are highlights from Thursday's Analyst Blog:

Waste Management Teams with BDX

Waste Management Inc.'s (NYSE: WM) subsidiary, WM Healthcare Solutions and Becton, Dickinson and Company (NYSE: BDX) have entered into an agreement to recycle medical sharps waste from hospitals and other health care facilities. The companies are jointly launching the BD ecoFinity Life Cycle Solution – an innovative service that will recycle medical sharps waste to manufacture new products.

Becton, Dickinson is a medical technology company that serves health care institutions, life science researchers, clinical laboratories, industry and the general public. The company manufactures and sells a broad range of medical supplies, devices, laboratory equipment and diagnostic products.

Waste Management will collect and process the materials from Becton, Dickinsons' network of health care customers and then give them back to the latter for the manufacturing of new products. The program will help health care facilities reduce the materials that go into disposal, increase the use of recycled materials in new products, and manufacture products in a more sustainable manner.

Becton, Dickinson believes that more than 70% of its overall sharps waste may be recovered and recycled rather than be permanently disposed off in landfills as is the practice now. This agreement with Becton, Dickinson showcases Waste Management's expertise in comprehensive waste services, in particular the areas of recycling, landfill, waste-to-energy and consulting services.

The alliance will also help Waste Management meet its sustainability goals – nearly tripling the amount of recyclables it processes by 2020 – and investing in emerging technologies for managing waste.

We currently have a Zacks #3 Rank (short-term Hold recommendation) on the Waste Management stock.

Houston, Texas-based Waste Management is the largest provider of comprehensive waste management services in North America. The company provides collection, transfer, recycling and resource recovery, and disposal services to nearly 20 million residential, commercial, industrial and municipal customers.

The company is also a leading developer, operator and owner of waste-to-energy and landfill gas-to-energy facilities in the U.S. Waste Management competes with Casella Waste Systems Inc. (Nasdaq: CWST), Republic Services Inc. (NYSE: RSG) and privately held Safety-Kleen Inc.

Telefonica Sets 3-Year Growth Plan

Spanish telecom giant Telefonica (NYSE: TEF) set its annual revenue growth target at 1% to 4% through 2013 at its investor meeting in London.

A weak Spanish market remains a concern for the company as customers are switching to cheaper offers from its competitors. Telefonica expects its operating margin to decline slightly over the three-year period from 38% earned in 2010, but remain above the mid point of the 30–40% range.

We believe Spain is not working in favor of Telefonica. The economic downturn in that country has been more than expected and is likely to drag the company's profits and liquidity. Further, the company's Spanish revenue continues to be affected by the ongoing reduction in mobile termination rates, which is the fee that operators charge each other to connect calls.

However, weak Spanish operations are expected to be fully offset by strong growth in Latin America and Europe. Latin America is one of the best performing areas and remains the principal growth region for Telefonica. This segment continues to post healthy subscriber additions on a quarterly basis. The company's subscriber base is expected to expand to more than 340 million by 2013 from 287.6 million reported in 2010.

Telefonica continues to invest in growth and transformation projects, fostering the development of broadband services (both fixed and wireless). The company will invest €27 billion, distributed equally over three years (2011–2013). We believe increased adoption of mobile broadband will fuel earnings growth ahead.

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