On June 2nd, the Federal Trade Commission approved the deal and it is expected to close in 2H08.

Incorporated in 1969 and based in Dublin, Ohio, Wendy's International is the third largest fast food hamburger chain, operating and franchising quick-service restaurants in the United States, Canada, and internationally. At the end of 1Q08, there were 6,622 Wendy's restaurants operating under the brand Wendy's. Of these restaurants, 1,407 (21%) were operated by the company, and 5,215 (79%) by the company's franchisees.

Can Torchmark Find a Spark?

We are maintaining our Hold rating on Torchmark Corporation (TMK) as we do not see near-term upside catalysts to support a broadening of TMK's price-to-book multiple at this time. We remain hesitant about the impact of recessionary conditions on TMK's life insurance markets.

American Income is TMK's most profitable distribution system, contributing roughly 30% of its total underwriting income. We remain very optimistic in regards to both our short and long-term growth during 2008 and beyond.

In our opinion, the current recessionary conditions can adversely affect TMK's life insurance markets. As TMK mainly serves the middle income market for individual protection life insurance, competition is mainly from alternative uses of customer's disposable income. At this point since employment levels have fallen, potential customers may be less likely to buy policies and existing policyholders may fail to pay premiums.

Based on the first quarter results and company guidance, we are maintaining our 2008 and 2009 earnings expectations at $5.90 per share and $6.45 per share respectively. Currently, the shares trade at 1.84x the 1Q08 book value of $33.92 per share. Our new six-month price target of $67.75 per share reflects a price-to-book multiple of 1.80x to our estimated book value of $36.60 per share at September 30, 2008.

Upping Hold-Rated Banco Bilbao

We are maintaining our Hold on Banco Bilbao Vizcaya Argentaria, S.A. (or BBVA), (BBV). In its first quarter, BBVA posted net earnings before non-recurring items of 1.4 billion, up 15% and broadly in line with our estimate. Results reflected solid growth net interest income, due to higher volumes and improved margins. Non-interest expense rose 17% year over year, while loan loss provisions rose 49%, largely due to a growing loan book.

We are increasing our 2008 EPADS estimate to $2.60 from $2.56, mainly due to changing FX [foreign exchange] assumptions from recent US$ depreciation against the euro. Our initial 2009 estimate is $2.95. We expect recent operating trends to continue near term. We believe the recently increased dividend is safe.

We believe the implementation of the consumer-focused business model will continue to benefit BBVA's bottom line. Specifically, BBVA is concentrating on fast-growing retail businesses in Spain, consumer finance, cards, and small and medium-sized enterprises, where the bank is benefiting from the rising GDP levels and should increase market share.

At its current price, BBVA trades at 7.5X the consensus 2009 earnings estimate, a 17% discount to the industry P/E median. Our $23 target price represents roughly a 7 ¾X multiple of 2009 estimated earnings of $2.95 per share.

California Pizza Kitchen Cools

We downgrade California Pizza Kitchen, Inc. (CPKI) to a Hold from Buy, as we expect the company to continue from suffering declining traffic, the de-leveraging of its rent expense, and shrinking return on equities throughout 2008. Morover, the shares are trading at 20.5x our estimates and 17.8x consensus, well above CPKI's growth at a time when there is reduced visibility and above-average estimate risk.

However, we expect CPKI can rebuild momentum in 2009, grow earnings at a mid-teens average rate over the next five years by adding full-service restaurants in existing and new markets, increasing comps and restaurant margins through its new prototype restaurant design, further penetrating the fast casual market with the new ASAP concept, repurchasing shares, and building its lucrative Kraft frozen pizza licensing business. With a chain of just 239 restaurants, we think the company can grow the units at an average rate of 10 percent annually, while keeping an eye on profitability.

When California Pizza enters new markets, it takes on an increased number of risks because it is less familiar with the areas, local tastes and preferences. Again, if the company's signature individual pizzas lose appeal, earnings and the stock price may be adversely affected. We have a target of $15 on the stock.

Bristol Myers a Buyout Candidate

Growth of mega-blockbuster Plavix is helping Bristol-Myers Squibb Co. (BMY) drive earnings growth up near 14 percent in 2008. While patent expiration of the blood-clot preventive drug in 2011 will continue to be a concern, Bristol's pipeline disappointments are no more serious than the majority of its large-cap pharma peers.

The company does have an attractive mid-to-late-stage pipeline, and it has been working to reduce costs and shed less profitable and non-core businesses. We think it is likely that Bristol's efforts will pay off between now and late 2011 in order to accelerate growth past the patent expiration.