CHICAGO, May 14, 2012 /PRNewswire/ -- Zacks Equity Research highlights Eastman Chemical (NYSE:EMN) as the Bull of the Day and Kirkland's (Nasdaq:KIRK) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Biogen Idec (Nasdaq:BIIB),Abbott (NYSE:ABT) and Novartis (NYSE:NVS)
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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 are retaining our Outperform recommendation on Eastman Chemical Co. (NYSE:EMN). First quarter adjusted earnings of $1.22 per share beat the Zacks Consensus Estimate. Revenue growth was aided by higher selling prices.
Moving ahead, we believe that the company is well placed to benefit in the second-half of the year from the synergies of its impending acquisition of Solutia. Eastman Chemical's diversified chemical portfolio, along with its integrated and diverse downstream businesses, is driving its earnings.
The company also benefits from business restructuring, recent acquisitions, cost-cutting measures and increased capacity additions. Our long-term Outperform recommendation on the stock indicates that it will perform above the broader market. Our price target of $61 is based on 11.7x our fiscal 2012 earnings estimate.
Kirkland's, Inc. (Nasdaq:KIRK) posted fourth-quarter 2011 earnings of $0.72 per share, which missed the Zacks Consensus Estimate of $0.74. But it was above the prior-year earnings of $0.66, fueled by strong sales during Harvest and Christmas. High-rising prices of commodities as well as slow recovery of global economy is negatively impacting the company's margins.
The company has also lowered its earnings guidance for the first quarter 2012 on the back of lower comparative sales during the period. Moreover, overdependence on Chinese vendors poses a threat. Hence we maintain an Underperform rating on the stock.
Based on 2012 earnings estimate of $1.05, the stock is trading at 13.0x compared to the industry average of 20.5x. Our target price of $12.00 is based on approximately 11.4x our 2012 earnings estimate.
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Standard Review for Biogen's BG-12
Biogen Idec (Nasdaq:BIIB) recently announced the acceptance of its regulatory filings in the U.S. and E.U. for its oral multiple sclerosis candidate, BG-12. The U.S. Food and Drug Administration (FDA) has granted standard review to the candidate, which means a response should be out in late 2012/early 2013.
The regulatory filings were based on data from the phase III DEFINE and CONFIRM studies which showed that treatment with BG-12 led to a significant reduction in disease activity in multiple sclerosis patients. Moreover, the candidate had a favorable safety and tolerability profile.
Biogen is also seeking approval for BG-12 in Canada and Switzerland.
Biogen is the market leader in therapies for the treatment of multiple sclerosis (MS). We believe the company will continue to retain a leading position in the MS market. Biogen is working on consolidating its position in the MS market and has an impressive late-stage pipeline of drugs including BG-12.
Meanwhile, Biogen and partner Abbott (NYSE:ABT) moved their MS candidate, daclizumab, into a two-year phase III study (DECIDE) in July 2010. Daclizumab is being evaluated as a once-monthly or bi-weekly subcutaneous injection for relapsing-remitting MS. PEGylated interferon rounds up Biogen's late-stage MS pipeline. PEGylated interferon is currently in a phase III study (ADVANCE).
Our Take
We believe BG-12 could become a leader in the oral MS market once launched. BG-12 should help drive long-term growth. Biogen has been facing additional competition in the multiple sclerosis market in the form of Novartis' (NYSE:NVS) Gilenya. Moreover, several companies besides Biogen are working on bringing an oral multiple sclerosis drug to market.
We currently have a Neutral recommendation on Biogen, which carries a Zacks #3 Rank (short-term Hold rating).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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