The stock is currently trading at a P/E multiple of 17.6. Given that the company resumed its share buyback program in fiscal 2006 and is exhibiting modest EPS growth, we expect the stock to trade in the top-end of the historical valuation range; hence, the target price of $66.00 is based on a 19 P/E on trailing 12-month earnings.

Strength Continues at NDS Group

NDS Group (NNDS) reported a solid fiscal third quarter of 2008 despite a currency headwind, and beat our revenue estimate handily while slightly exceeding our earnings estimate. Continued strength in conditional access, gaming and DVR technologies, as well as new deals in emerging markets helped drive revenues and growth.

We have maintained our revenue and earnings estimates for 2008 and 2009 and expect the company to continue to expand in emerging markets while adding additional revenue streams in developed markets. We continue to rate shares of NDS a Buy with a target price of $63.00 based on NDS selling between 23.0x 23.2x our new 2008 EPADS estimate of $2.72.

We believe shares of NDS Group should continue to perform well due to our strong outlook for 2008 and 2009. The results for the third quarter were much better than our estimates due to the new technology initiatives, and we expect the company to continue to grow revenues in excess of 18.6%, while growing earnings per share by more than 16.8% for 2008 as the company has now established a presence in several emerging markets and can now begin to leverage its presence in these markets to fuel growth through add-on service revenues.

Daimler Still Feeling Headwinds

Daimler AG (DAI) is benefiting from aggressive efficiency initiatives, cost reduction efforts and new model launches. The company is likely to benefit from its focus on the emerging markets including Russia, China and India. Strong earnings performance gives a positive view on the stock.

However, the company is facing many challenges including exchange rate fluctuations, weak auto pricing, rising raw material costs, compliance with CO2 emission reductions, as well as a slowing U.S. economy. Hence, we rate it a Hold with a six-month target price of $85.00, which is based on a P/E multiple of around 9.6x our 2008 earnings estimate.

Currently, Daimler AG shares are trading at a P/E multiple of 8.8x our 2008 earnings estimate of $8.86, which is above the industry median of 9.6x. The efficiency improvement measures encourage us. Moreover, Standard & Poor's Ratings Services raised Daimler AG's long-term corporate credit ratings to 'A-' from 'BBB+' and assigned it a positive outlook.

Daimler AG reported first quarter 2008 results. In the first quarter, earnings per share were at $2.00, as compared to $2.95 in the prior-year quarter. Decrease in earnings was primarily driven by subdued performance from its truck division. Revenue increased slightly to $36.7 billion from $36.5 billion from the same period last year.