A summary of special studies prepared by the Global Securities
and Research Group
NEW YORK, May 25 /PRNewswire/ -- The following was issued today by Merrill
Lynch & Co., Inc.:
The View From the U.S.
-- Lodging industry fundamentals in the United States are intact and
should improve during 1999-2000. Except for the most inexpensive
projects, tight capital markets in 1998 restricted access to
development capital. As a result, room growth is expected to slow and
enable demand to absorb the increases of 1997-1998. Barring a dramatic
slowing in the U.S. economy, occupancy rates are expected to be a
little soft in the 1999 first half as the supply pipeline delivers its
remaining projects. Occupancy rates are then expected to stabilize.
Downward pricing pressures also should dissipate. In addition, some
margin improvement is expected as hoteliers, removed from the
acquisition market, continue to re-focus on operations (Contact Denise
Wilder Warren, vice president, 212-449-9337).
-- A number of newspaper companies are starting to look very smart as the
market is turning its attention to the internet assets of each company
in the hopes of finding a deal. But there are concerns. More
newspapers are expected to take stakes in internet companies perhaps
trading promotion for equity. There also is concern about the
transition newspapers will face as classifieds move on-line. However,
the near term fundamentals are decent and some companies have amassed
on-line assets that could prove a hedge to declining value elsewhere.
(Contact Lauren Rich Fine, first vice president, 212-449-1179).
-- The past nine months have proved death trends aren't as predictable as
had been thought, and have posed operating challenges for the death
care industry. The long-term fundamentals haven't changed. However,
advances in healthcare and education, globalization and competition for
future market share through consolidation and sales of pre-arrangements
have posed operating challenges for companies in the sector. Likewise,
these factors have had a profound impact on the valuation of the public
companies in the sector because of earnings shortfalls and other
financial problems (Contact Fran Blechman Bernstein, first vice
president, 212-449-2316).
-- After 20 months of bad news which has punished railroad stocks, there
is light at the end of the tunnel. Rapidly improving service in the
west has returned railroad on-time performance nearly to the levels
that existed before congestion problems began almost two years ago. As
reliability returns to levels which prevailed before western congestion
began, rails even may be able to again raise rates (Contact Michael
H. Lloyd, first vice president, 212-449-2327).
-- There are opportunities for value among smaller-capitalized truck
stocks, and most companies in the sector are expected to continue to
report quality earnings gains. The view is encouraged by the volume
and pricing growth across most sectors, with upside surprises being
fueled by cost-cutting (Contact Jeffrey A. Kauffman, first vice
president, 212-449-8076).
The View From Outside The U.S.
-- The Asia crisis in reverse, according to a survey by fund managers from
across the globe. They are bears of bonds and bulls of commodities,
cyclicals and emerging markets, especially Asia. For the first time,
U.S. fund managers who say the Asian economic crisis will have no
impact on U.S. profits outnumber those who see a significant impact
(Contact Trevor Greetham, 011-441-71-772-1535 or Charles I. Clough,
212-449-0904).
-- The latest series of U.K. business surveys show a continuing and
pronounced recovery in business optimism. The change in confidence
since last autumn has been the largest since the UK's exit from the
exchange rate mechanism (ERM) in 1992. In part, this reflects the
extreme nature of the collapse in confidence seen last autumn: for
example, the fall in the CBI's measure of manufacturing confidence last
October was the largest since 1980, a year in which manufacturing
output fell a staggering 8.7 percent. One striking feature of recent
survey data is that export confidence has continued to recover despite
renewed sterling strength (Contact Paul Turnbull, 011-441-71-772-1574).
Merrill Lynch Global Securities Research and Economics Group
-- Merrill Lynch Global Securities Research and Economics has more than
700 analysts in 27 countries. Merrill Lynch is the only firm to place
first in five of the six Institutional Investor research team
surveys (U.S. Equity, U.S. Fixed Income, Latin America, Europe and
Asia). In addition, the firm ranked first in The Wall Street Journal
1998 All-Star Analysts Survey, and the Financial News' "Poll of Polls,"
a summary of nine equity research surveys from around the world.
SOURCE Merrill Lynch & Co., Inc.
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Company News On-Call:
http://www.prnewswire.com/comp/555800.html or fax,
800-758-5804, ext. 555800
CONTACT:
Susan McCabe, 212-449-0389, or Joanne
Tutschek, 212-449-7278, both of Merrill Lynch & Co., Inc.
Research Communications
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