CHICAGO, July 19, 2011 /PRNewswire/ -- Zacks Equity Research highlights Brightpoint Inc. (Nasdaq: CELL) as the Bull of the Day and Medtronic (NYSE: MDT) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Amgen (Nasdaq: AMGN), Novartis (NYSE: NVS) and GlaxoSmithKline (NYSE: GSK).
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Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
We upgrade our recommendation for Brightpoint Inc. (Nasdaq: CELL) to Outperform based on our view that galloping demand for high-end smartphones and tablets throughout the world will drive the company’s valuation level higher in the near future.
We believe the negative consequences of the proposed merger between AT&T and T-Mobile USA are already reflected in the current valuation as it has plummeted nearly 39% in the last four months after this news surfaced. In the previous two quarters, Brightpoint managed record-high mobile devices. Most importantly, the majority of these wireless handsets were managed through the company’s high-margin Logistic Services.
Management reaffirmed a rosy picture for the rest of 2011. We believe the business fundamentals of Brightpoint remain intriguing. Newly won distribution agreements coupled with effective cost control strategies will pave the way for the company’s future earnings growth. Our price target of $9.75, is based on 11.9x our fiscal 2011 earnings estimate, approaching the S&P 500 average.
Medtronic’s (NYSE: MDT) two largest segments - CRDM and Spinal have been witnessing several challenges over the past few quarters.
Lower procedure volume and pricing pressure continues to bother the company. Although the company expects the situation to improve with new product launches, any imminent benefit can be ruled out at present. Concerns regarding overutilization of stents and issues with its bone growth protein rhBMP-2 are also haunting Medtronic.
Additionally, uncertainty hovers around the course of action to be adopted by the new CEO. Given these issues, we downgrade the stock to Underperform until any further clarity is available regarding the growth profile of its core segments.
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Amgen’s Xgeva Wins EU Approval
Amgen (Nasdaq: AMGN) recently announced that it has received approval from the European Commission (EC) for Xgeva (denosumab). Amgen gained approval for the use of Xgeva for the prevention of skeletal-related events (pathological fracture, radiation to bone, spinal cord compression or surgery to bone) in adults with bone metastases from solid tumors.
In addition to granting approval, which applies to all 27 European Union (EU) member states, the EC also granted an additional year of data and market exclusivity in the EU given the significantly new indication for Xgeva and the clinical benefit demonstrated by the candidate compared to existing therapies. Approval was based on data from three pivotal phase III head-to-head studies which compared Xgeva to Novartis’ (NYSE: NVS) Zometa.
EU approval did not come as a surprise as Amgen had received a positive opinion from the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) for Xgeva in May 2011. The CHMP had also said that Xgeva should be granted an additional year of data and market exclusivity in the EU.
Xgeva is already approved in the US for the prevention of SREs in patients with bone metastases from solid tumors. Xgeva, which gained US Food and Drug Administration (FDA) approval on November 18, 2010, is off to a strong start with first quarter 2011 sales coming in at $42 million, up from the $8 million reported in the fourth quarter of 2010. Amgen said that Xgeva is seeing usage among both oncologists and urologists.
Amgen is currently seeking approval in other countries including Australia, Mexico, Russia, Japan and Switzerland. While Daiichi Sankyo is Amgen’s licensing partner in Japan, Amgen has a collaboration agreement with GlaxoSmithKline (NYSE: GSK) in countries where it does not have a commercial presence.
Denosumab is also available under the trade name Prolia for the treatment of osteoporosis in postmenopausal women at increased risk of fractures or patients who have failed or are intolerant to other osteoporosis treatments.
Neutral on Amgen
We currently have a Neutral recommendation on Amgen. We expect investor focus to remain on the successful commercialization of Prolia/Xgeva, which is the future of Amgen.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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