Zacks Equity Research highlights Transocean (NYSE: RIG) as the Bull of the Day and Telmex (NYSE: TMX) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on AvalonBay Communities (NYSE: AVB), Amphenol Corp. (NYSE: APH) and U.S. Bancorp (NYSE: USB).

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: Transocean (NYSE: RIG)

We are maintaining our Buy rating on Transocean shares ahead of the company’s first-quarter results. With oil prices sitting at record highs, Transocean should continue to benefit from increased exploration and production (E&P) spending by oil companies, improved rig utilization rates, and higher dayrates.

We continue to believe that the company’s recently completed merger with GlobalSantaFe transforms it into an offshore drilling powerhouse. With a backlog of nearly $32 billion, the new Transocean offers an unparallel level of earnings and cash flow visibility.

Bear of the Day: Telmex (NYSE: TMX)

We are reiterating our Sell recommendation on Telmex ADRs. First quarter 2008 results were lower than expected. As a result, we are changing our 2008 and 2009 estimates. Moreover, the Mexican domestic growth has also stalled. Expansion in other Latin American regions, particularly Brazil, is expected to continue in the near future.

Meanwhile, the company still needs to increase the profit margins of its acquired units, which are currently well below those of its Mexican business. Its valuation seems excessive if compared to other Latin American operators. The still difficult economic environment in the U.S. is another source of concern.

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AvalonBay Communities (NYSE: AVB)

AvalonBay Communities posted good results in the first-quarter, with FFO [funds from operations] per share increasing 11% over the year-earlier period. Growth was driven by higher rental rates, contributions from new developments and smaller share counts. However, we still rate the shares a Hold due to a still-high comparative valuation, and what could be worsening multi-family fundamentals.

While new apartment construction is down, more unsold condos and homes are now being rented which adds competition to the company’s high-end rentals. Additionally, U.S. job growth is non-existent, which will negatively affect apartment demand.

Amphenol Corp. (NYSE: APH)

There are several positive factors impacting Amphenol Corporation, including favorable conditions prevailing in the Interconnect Products business. The company’s top-line growth is benefiting from improved end-market demand, new product rollouts and market share gains.

APH is experiencing broad-based growth across all its geographical regions with strong sales from the industrial, military/aerospace, mobile consumer products and infrastructure, and IT and data communications end-markets. We continue to rate APH a Hold with a target price of $48.

U.S. Bancorp (NYSE: USB)

U.S. Bancorp’s core results were three cents ahead of expectations. Results were driven by an increase in both net interest and noninterest income, despite the current turmoil in subprime lending, liquidity and credit markets.

However, continued stress in the residential real estate markets and mortgage-related industries is impacting the company’s credit quality and has resulted in an increase in loan provisions, which should remain elevated through the balance of the year. Thus, we reiterate our Hold rating on the shares.

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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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