For Immediate Release
Chicago, IL - January 25, 2012 -
Zacks Equity
Research
highlights
DaVita, Inc.
(
DVA
) as the Bull of the Day and
Hhgregg, Inc.
(
HGG
) as the Bear of the Day. In addition, Zacks Equity Research
provides analysis on
Mylan, Inc
. (
MYL
),
Teva Pharmaceutical
(
TEVA
) and
Novartis
(
NVS
).
Full analysis of all these stocks is available at
http://at.zacks.com/?id=2678
.
Here is a synopsis of all five stocks:
Bull of the Day
:
We are upgrading our recommendation on
DaVita, Inc.
(
DVA
) to Outperform based on the company's strong cash flows and
strategic acquisitions. The new bundled ESRD payment system is also
expected to be a long-term positive. The company's third-quarter
earnings slightly exceeded the Zacks Consensus Estimate on the back
of strong top-line growth, partially offset by higher operating
expenses.
Moreover, a strong cash position expands the potential for
meaningful M&A. While the acquisition of DSI should bring in
new opportunities in most states, the company has to divest some of
its centers as a condition. Nevertheless, we believe downside from
current levels is likely limited.
Our six-month target price of $96.00 equates to 19.0x our
earnings estimate for 2011. This price target implies an expected
total return of 20.3% over that period. This is consistent with our
Outperform recommendation on the shares.
Bear of the Day
:
Hhgregg, Inc.
(
HGG
) has recently expressed its apprehension with regard to its
third-quarter 2012 earnings to decline to approximately $0.60 per
share, from the prior-year quarter of $0.66. The estimate slid on
the back of lower than expected margins in the video category owing
to the promotional activities across all screen sizes.
Hhgregg also expects advertising expenses to escalate due to the
recent initiatives taken up to increase its market share in the
appliance and home office categories. In addition, Hhgregg has also
launched a mobile product offering to enhance its customers
shopping experience. The preliminary third quarter 2012 results
also led to a downward revision in fiscal 2012 earnings in the
range of $1.05 to $1.15, compared with the previous guidance of
$1.26 to $1.41.
Going forward, we expect net sales and operating margins to
remain muted owing to the seasonal shopping patterns, rising costs
and competitive pressures. Moreover, weakness across the consumer
electronics and appliances industry may turn out to be serious
headwinds to the top-line. We thus maintain our Underperform rating
on the stock.
Latest Posts on the Zacks
Analyst Blog
:
Mylan Outperforms as Generics Rule
We recently upgraded our recommendation on
Mylan, Inc
. (
MYL
) from Neutral to Outperform with a target price of $26.00.
Mylan is one of the leading players in the US generics market.
We are encouraged by Mylan's geographic reach and product depth
along with a robust generic product pipeline. A large number of
high-value branded pharmaceuticals have begun to go off-patent and
many more will lose patent exclusivity in the next few years.
Mylan has a robust pipeline and it hopes to exploit the patent
cliff overhanging the pharma industry. We believe the generic
segment will post strong sales in the US in 2012 with more than 500
new product launches expected to generate $800 million in revenue.
In 2012, Mylan hopes to make 13 date-certain launches, 4 being
first-to-file opportunities of generic versions of
Teva Pharmaceutical
's (
TEVA
) Provigil (April 2012), Takeda's Actos (August 2012) and Actoplus
Met (December 2012) and
Novartis
' (
NVS
) Diovan HCT (September 2012). Other key launches include the
generic versions of Zyprexa (April 2012), Plavix (May 2012),
Viramune (May 2012) Clarinex (July 2012) Singulair and Singulair
Chew (August 2012), Avapro and Avalide (September 2012) and Atacand
(December 2012).
In Europe, Mylan expects to launch about 350 products in 2012.
These new product launches in combination with easing pricing
comparisons could lead to improved growth trends in Europe. In the
Asia-Pacific region, Mylan's growth is driven by its Indian
subsidiary Mylan Laboratories, which is one of the fastest growing
active pharmaceuticals ingredient (
API
) manufacturers in India.
Mylan conducts its specialty business through Dey Pharma, which
markets branded specialty injectable, nebulized and transdermal
products for life-threatening conditions. The segment's main
products are the EpiPen Auto-Injector (severe allergies) and
Perforomist Inhalation Solution (a formoterol fumarate inhalation
solution for the treatment of chronic obstructive pulmonary
disorder). These products not only offer Mylan the necessary
diversification from generics but contribute to revenue growth.
Management expects Dey to deliver substantially going forward, as
the EpiPen and Perforomist franchises surpass expectations.
Get the full analysis of all these stocks by going to
http://at.zacks.com/?id=2649
.
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.
About the Analyst Blog
Updated throughout every trading day, the
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and events impacting stocks and the financial markets.
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Continuous analyst coverage is provided for a universe of 1,150
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which gives them keen insights to developments that affect company
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are six-month time horizons.
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DAVITA INC (
DVA
): Free Stock Analysis Report
HHGREGG INC (
HGG
): Free Stock Analysis Report
MYLAN INC (
MYL
): Free Stock Analysis Report
NOVARTIS AG-ADR (
NVS
): Free Stock Analysis Report
TEVA PHARM ADR (TEVA): Free Stock Analysis
Report
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