Infrastructure is increasingly being financed through bond issues, which hopefully is a positive. Federal is an unknown until after the election and then we still may be wondering what s happening. Industrial/Commercial is problematic, given the current economic environment. With this scenario, we maintain our Hold opinion for URS; our target price is based on existing market conditions.

The company's Q2-08 revenues were up a roaring 103.5% -- but EPS were up just 2.9% -- because of the impact of the Washington Group International, Inc. acquisition. URS reaffirmed its expectation that fiscal 2008 revenues will be approximately $9.8 billion.

URS continues to see favorable trends in the Federal Government sector. There is strong funding for O&M programs, which is expected to reach $300 billion in fiscal 2009, a 7% increase over fiscal 2008 levels, increased opportunities to support long-term Department of Defense (DoD) initiatives and stable funding for the Department of Energy's (DoE) environmental and nuclear programs, including the National Nuclear Security Administration.

With respect to Infrastructure, URS's long-term outlook is very positive. Its business has so far not been affected by the economic slowdown. The 2009 fiscal year begins on July 1 for many states, and at that time there will be a clearer picture of that business sector for the second half of the year and for 2009.

Sprint Nextel at a High Premium

Sprint Nextel Corp. (S) is a leading provider of business and wireless communications services in the U.S. The company continues to experience lower revenue due to weakness in its wireless business and associated customer retention problems.

Although postpaid churn (customer switch) improved in the recent quarter, it still remains a major concern as overall subscribers have opted for competitive services -- AT&T Wireless (T) and Verizon Wireless (VZ) -- possibly associated with complications of Sprint's network integration of CDMA and iDEN technologies. Performance in the recent quarter has been tepid and management provided a disappointing outlook for the remainder of 2008 with further erosion expected of its subscriber base.

Sprint Nextel currently trades at 43.2x our 2008 EPS estimate, which is at a significant premium to the forward P/E ratio for the industry group average. On the basis of enterprise value (EV) to EBITDA (a common valuation metric for wireless carriers), the stock is also trading at a premium to the average for the domestic carrier segment.

We continue to believe that a lower margin revenue mix, incremental investment in business operations and start-up costs related to the build-out of the 4G WiMAX wireless infrastructure will have an adverse impact on the bottom line. Hence, we maintain our Hold rating with a $7.00 price target based on a 2008 EV/EBITDA of 4.9x. in proximity to the industry group average.