For Immediate Release
Chicago, IL – October 13, 2010 – Zacks Equity Research highlights: Carnival Corporation (CCL) as the Bull of the Day and Immucor (BLUD) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Intel Corporation (INTC, Pfizer (PFE) and King Pharmaceuticals (KG).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506.
Here is a synopsis of all five stocks:
Bull of the Day:
Carnival Corporation’s (CCL) third quarter 2010 earnings were modestly ahead of the Zacks Consensus Estimate. The company is the largest and historically the most profitable cruise operator in the world.
A strong booking and pricing trend and successful cost-containment efforts are paying off, and thus the fiscal 2010 outlook has been raised by the company. We believe that a strong balance sheet and solid cash generation should position Carnival well and promise above-average long-term growth in an improving economy, marked with slower industry capacity growth and reviving consumer demand.
The company is also experiencing a decline in fuel prices and favorable exchange rate. Thus, we are upgrading the stock from Neutral to Outperform.
Bear of the Day:
Immucor (BLUD)began fiscal 2011 on a disappointing note with EPS of $0.30, which met the Zacks Consensus Estimate but remained unchanged from the year-ago quarter.
The company has witnessed lower demand from both reagents and instruments, based on which outlook was lowered. While Immucor earns a major part of its revenues from traditional reagents, the company lost some customers to competition as it was unable to provide the required services.
Although the company is taking corrective measures, it will be a while before a major impact is noticed. Moreover, we remain concerned about the quality issues that have yet to be resolved. Based on these factors, we lower our estimates and downgrade the stock to Underperform.
Latest Posts on the Zacks Analyst Blog:
Intel Clears Lower Hurdle in Q3
Following Intel Corporation’s (INTC self-described “best quarter ever” in its fiscal second quarter earnings report back in July, the world’s largest chip-maker has again posted a positive surprise. This time INTC reported 52 cents per share on revenues totaling $11.1 billion in the quarter. The Zacks Consensus Estimate had been 50 cents per share on revenue on $11.01 billion.
The headline number sports a year-over-year net income increase of 59%, although as we saw in Intel’s 2nd quarter, year-over-year comps have been fairly easy to exceed. After all, in the 3rd quarter of 2009, the recession had only just come to an end, but corporate and consumer spending would take a few quarters before picking up.
Also, today’s earnings beat was followed by lowered guidance for the 3rd quarter from Intel in late August. This caused an avalanche of downward analyst estimate revisions in the past couple months — 8 analysts had taken down EPS estimates for the quarter, and 12 had done so for the December quarter, fiscal year 2010 and fiscal 2011, for good measure.
Even still, Intel posted revenues over $11 billion in a quarter for the first time in the company’s history, and Intel has initiated guidance for the fiscal 4th quarter at $11.4 billion. This, however, is roughly in line with the Zacks Consensus revenue estimate for fiscal Q410.
Ahead of today’s earnings report, investors seemed to feel confident about Intel’s numbers. By the closing bell Tuesday, INTC shares finished up 1.07% (21 cents per share), and shot up another 31 cents in the after-market but prior to the earnings release, before pulling back to around $19.93 per share.
The Zacks #3 Rank on INTC shares was upgraded on October 2nd. Analyst estimate revisions going forward would likely put upward pressure in the near term on the stock, especially if analysts are in agreement about Intel’s positive direction.
King in Pfizer’s Court
The pharmaceutical industry continues to be in acquisition mode with pharma giant Pfizer (PFE) announcing its intention to acquire King Pharmaceuticals (KG) for $3.6 billion. Pfizer and King Pharma have entered into a definitive merger agreement whereby Pfizer will acquire King Pharma for $14.25 per share.
Offer Price Represents 40% Premium
The offer price represents a 40% premium on King Pharma’s closing price as of Oct 11, 2010. The Boards of both companies have approved the deal, which is expected to boost Pfizer’s 2011 and 2012 earnings by 2 cents annually. The company expects 2013 – 2015 earnings to be boosted by 3-4 cents annually. Pfizer also expects to achieve cost savings of at least $200 million by late 2013.
2010 Guidance Remains Unchanged
Pfizer maintained its guidance for 2010: the company expects earnings towards the higher end of $2.10 – $2.20 on revenues of $67 – $69 billion. The 2010 Zacks Consensus earnings estimate currently stands at $2.21.
Pain Management Portfolio Main Focus
With several of King Pharma’s products facing slowing prescription trends mainly due to generic competition, we believe that Pfizer’s main attraction is towards King Pharma’s pain management portfolio. With this acquisition, Pfizer is looking to strengthen its position in the pain management market, which represents a significant commercial opportunity. The addition of King Pharma’s pain products will diversify Pfizer’s product portfolio and bring in additional sources of revenue.
Pfizer’s main pain management products include Lyrica and Celebrex. King Pharma’s lead pain management products include Embeda, Flector Patch, and Avinza. While Flector Patch and Avinza are yet to gain traction in the pain management market, Embeda represents significant potential.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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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IMMUCOR (BLUD): Free Stock Analysis Report
CARNIVAL CORP (CCL): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
KING PHARMACEUT (KG): Free Stock Analysis Report
PFIZER INC (PFE): Free Stock Analysis Report
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