For Immediate Release
Chicago, IL – May 5, 2010 – Zacks Equity Research highlights Depomed (DEPO) as the Bull of the Day and King Pharmaceuticals (KG) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Pfizer Inc. (PFE), MasterCard Inc. (MA) and Baker Hughes Inc. (BHI).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
We have been bullish on Depomed (DEPO) in the past, and we remain enthusiastic about the development pipeline.
PHN candidate DM-1796 is currently under review at the U.S. FDA. Acceptance of the filing triggers a $10 million milestone payment from partner Abbott Labs to Depomed. In the meantime, Depomed is looking to begin a confirmatory phase III program with Serada any day now.
Over the long-run, we think it would be wise to average down or establish a position at this level. Our target is $7 based on discounted future EPS.
King Pharmaceuticals’ (KG) fourth quarter earnings of $0.23 were a penny shy of the Zacks Consensus Estimate. Although revenues increased 26.1% from the year-ago period, we remain concerned about the declining prescription trends for key products over the past few quarters.
Moreover, products like Skelaxin, Avinza and EpiPen are all facing patent challenges. Chances are high that Skelaxin will start facing generics from 2010 unless King settles with the generic companies that are seeking to launch their products.
While the recent approval and launch of Embeda was a major positive for King, we remain concerned about pipeline setbacks, increasing competition, generic threats and declining prescription trends. We are, therefore, downgrading the stock to Underperform with an $8.75 target price.
Latest Posts on the Zacks Analyst Blog:
Pfizer Results Boosted by Wyeth
Pfizer Inc. (PFE) reported first quarter adjusted earnings of 60 cents per share, above the Zacks Consensus Estimate of 53 cents and 11% above the year-ago earnings of 54 cents.
Performance was boosted by the Wyeth acquisition. This was partially offset by increased expenses, primarily due to the addition of the legacy Wyeth operations, and higher net interest expense.
Revenues were up 54%, mainly due to the favorable impact of the Wyeth acquisition ($5.3 billion). Foreign exchange boosted revenues by $733 million, or 7%. This was partially offset by $137 million, or 1%, due to legacy Pfizer products. The US healthcare reform also affected revenues by $56 million. First quarter revenues came in at $16.8 billion.
MasterCard Outshines Estimates
MasterCard Inc.’s (MA) first quarter operating earnings per share of $3.46 came in substantially ahead the Zacks Consensus Estimate of $3.14 and $2.80 in the year-ago quarter. Net income for the reported quarter was $455 million, up 24% from $367 million in the prior-year quarter.
Results for the reported quarter improved over the prior-year quarter due primarily to better pricing, an increased number of processed transactions and higher operating margin. However, higher operating expenses as a result of increased fixed costs were on the downside.
Total revenue increased 13.1% year-over-year to $1.3 billion, primarily due to 5% favorable pricing changes, 4.6% growth in the number of processed transactions to 5.4 billion and a 10.9% increase in cross-border volumes. GDV [gross dollar volume] increased 8.3% to $631 billion during the reported quarter. As of Mar 31, 2010, MasterCard issued 1.6 billion MasterCard and Maestro-branded cards.
Baker Hughes Beats Estimates
Baker Hughes Inc. (BHI) reported first-quarter 2010 earnings of 41 cents per share, compared with the Zacks Consensus Estimate of 38 cents and year-ago earnings of 81 cents.
Though the results came in above our expectations, it was down year over year, due primarily to price deterioration in international businesses. However, with the improvement in pricing and customer spending, the company is expecting a better margin environment ahead. In addition, Baker Hughes will also benefit from the recently completed merger with BJ Services.
Revenue from Baker Hughes’ oilfield operations was $2.54 billion, down nearly 5% year over year but up 4.6% sequentially. Pre-tax operating profits decreased 27% year over year but increased more than 14% sequentially to $277 million. Pre-tax operating margin for the quarter was 11%, compared with 14% in the year-ago quarter and 10% in the previous quarter.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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