Facebook Linkedin Tumblr Twitter
Home Blog Page 14595

Pfizer (NYSE:PFE) Guides below Expectations

By
Carol Harper
-
Pfizer Inc (NYSE:PFE)

Pfizer Inc (NYSE:PFE) provided a tepid outlook for 2016 after delivering better than expected earnings, as well as, the revenue for the fourth quarter of 2015. Its guidance fell shy of the Street analysts’ estimations. However, its Chairman and CEO, Ian Read, expects to deliver another strong year due to its belief in key products that will continue to perform well. He also placed his bet on its product pipeline.

Profit Dips

Pfizer Inc reported net income of $613 million, down 50% from $1.23 billion while earnings plunged 47% to ten cents a share from 19 cents a share in the year-ago quarter. On an adjusted basis too, its net income fell 4% to $3.306 billion from $3.44 billion whereas adjusted earnings slackened 2% to 53 cents a share from 54 cents a share in the same period last year.

The company’s revenue grew by 7% to $14.05 billion from $13.12 billion. Foreign currency had an unfavorable impact of 7%. Its innovative products revenue increased 22% to $7.64 billion from $6.63 billion in the previous year quarter. On the other hand, established products revenue grew 5% to $6.26 billion from $6.41 billion. The pharmaceutical firm’s cost of sales as a percentage of revenue was 21.2% compared to 19.7%.

Outlook For The Year 2016

Moving ahead, Pfizer said that it was looking to deliver revenue of $49 – $51.0 billion for the current year. This was lower than the Street analysts’ expectations of $52.49 billion. While looking to deliver reported earnings of $1.54 – $1.67 a share, the pharmaceuticals firm expects adjusted earnings of $2.20 – $2.30 a share for the same period. This was also lower than the Street analysts’ predictions of $2.36 a share.

Pfizer said that it expects adjusted cost of sales as a percentage of revenue to be 21.0 – 22.0%. The company expects R&D expenses to be $7.3 – $7.8 billion. The company said that its guidance reflected the expected mid-to-high-single digit operational revenue uptick on an enterprises basis. However, the company also sees $2.3 billion as unfavorable impact from the generic competition for the products which have either lost patent or will it soon.

Story continues below

Oil Prices Fall Below $30 as Oil Producers Refuse Production Cuts

By
Andy Parker
-

The recent upward movement in oil prices could not be sustained as the commodity fell after demand outlook and oversupplies overwhelmed hopes of a production cut. Any expected action by OPEC and others has been played down.

Click Here For More Market Exclusive Updates & Analysis

Brent and WTI extend losses

Brent crude for April delivery dipped by over 3% or just over a dollar and was seen trading around $33.19 per barrel. The front-month contract for West Texas Intermediate (WTI) fell by 2.93% or $0.93 to $30.70, briefly falling below $30 again.

The only major development yesterday was that Russia’s energy minister and Venezuela oil minister informally discussed the prospect of holding a meeting between OPEC and non-OPEC members during the upcoming days. However, the new information failed to soothe the anxiety of market participants.

Analysts take

Meanwhile, Goldman Sachs (NYSE:GS) reiterated that any cooperation between OPEC and Russia is ‘highly unlikely’. Some Russian oil companies have projected a fall in output this year, which could also prevent Russia from reaching an agreement with OPEC members. Saudi Arabia remains a tough producer to convince among all. Assessing the current scenario, analysts have even projected that oil could fall below $30 per barrel again for an extended period.

Meanwhile, the magnitude of the oil oversupply can be seen from a report by Russia’s Energy Ministry that showed oil output in the region had increased to 10.88 million barrels a day in January from 10.83 million barrels per day in December.

The picture is no different in the U.S., which saw its oil stock rising by 4.7 million barrels to 499.6 million barrels, as reported by Reuters. The data from the American Petroleum Institute will be awaited later today to further gauge oil supply conditions.

Weakness in oil prices has already done its damage to oil companies, as BP plc (NYSE:BP) has reported its worst annual loss in the last 20 years. iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) traded 5.08% lower now at $4.86.

Story continues below

Wall Street Feels Oil’s Fall Today

By
Andy Parker
-

U.S. stock were broadly down as the sell-off continued out of the gate today. Weakness in Asian and European indices coupled with fresh losses booked by oil jointly weighed over earnings positives from yesterday.

Click Here For More Market Exclusive Updates & Analysis

Market points to lower opening

Before the opening, S&P 500 Futures had traded down by 14.50 points or 0.74% to 1,917. The S&P 500 is now trading at 1908. Both the Nasdaq and the Dow Jones are trading down more than 1.5%.

Up ahead, market participants are looking forward to monthly U.S. car sales data for January alongside earnings report from some significant names.  According to chief market strategist of ADS Securities, Nour Al-Hammoury, markets might pay more attention to oil prices in the absence of any major economic data release during the day.

Asian and European markets

In global markets, major Asian indices except China’s Shanghai Composite Index were in the negative. Shanghai managed to close 2.3% higher today after China’s central bank infused more liquidity into the system.

In Europe, disappointing unemployment data as well as the oil slide, guided markets lower. As the Eurozone jobless data hit a new four-year low, analysts have commented that quantitative easing by the European Central Bank is inevitable.

Yesterday, the U.S. stock market had recovered slightly after manufacturing data declined for the fourth straight month in a row. The disappointing number renewed hopes that the Federal Reserve may slow down its monetary tightening stance. These hopes found ground after Fed Vice Chairman, Stanley Fischer, indicated that the possibility of a rate hike this year could be pushed out further.

The Institute of Supply Management posted a January reading at 48.2, below expansion rate of 50. Also, the inflation dropped 0.1% in December and stood at 1.4% over the last year, below the Fed’s target of 2%. Following release of these data, CME Group’s FedWatch tool showed that the probability of rate hike in March declined to 14% in the afternoon from 21% in the morning.

Story continues below

Global Markets Weaken After Disappointing Data

By
Andy Parker
-

Major Asian indices except China’s Shanghai remained under pressure throughout the day, mirroring Wall Street sentiment. Softer factory activity across the globe kept investors anxious.

Click Here For More Market Exclusive Updates & Analysis

Asian markets in trouble

Oil prices resumed their downward journey as mounting oversupply and the fading probability of a meeting between oil producing countries disappointed investor hopes. Australia’s ASX All Ordinaries fell by 1% or 50.30 to 5,044. Hong Kong’s Hang Seng was down by 0.76% to 19,446.84 while Nikkei 225 shed 0.64% to 17,750.68. Taiwan’s TSEC 50 Index too fell by 0.32% to 8,131.24.

In India, the Reserve Bank of India kept key interest rates unchanged but hinted at embracing a more accommodative stance. Mumbai’s Sensex was seen trading down by 0.50% to 24,700.09.

Data weighing over markets

Meanwhile, European markets lost momentum amid global uncertainties and weakness in oil prices. FTSE 100 lost 1.58% or 95.96 points to 5,964.14 while Euronext shed 1.39% to 858.33. CAC 40 and DAX too were down by 1.65% and 1.43% respectively. Switzerland’s Swiss Market Index inched down by 1.50% to 8,185.92. The building sector in Britain has slowed down to a nine-month low.

Construction PMI in Europe dipped to 55 in January from 57.8 in December, hitting the lowest level in nine months. US manufacturing data published yesterday also failed to relieve investors. The main piece of good new was in Germany where unemployment hit a low of 6.2%.

The U.S. markets ended down yesterday despite a mid day recovery after economic data consistently came in below expectations. Also, subpar results announced by BP plc (NYSE:BP) reinforced the fact that the oil sector is in bad shape. CEO Bob Dudley’s statement that oil prices are likely to remain volatile throughout the year has spiked concerns as well.

The Dow Jones Industrial Average closed the previous session 0.10% or 17.12 points lower at 16,449.18. S&P 500 Index too lost o.o4% or 0.86 points to 1,939.38. Futures are broadly down in the premarket session. Canada’s S&P erased 1.23% to close the day at 745.53.

Story continues below

Currency Markets Jittery as Oil Heads Back Down

By
Andy Parker
-
US-Dollar pro Packung

After slumping for a day the Japanese yen regained its momentum against the U.S. dollar and the euro. Strength in the Japanese yen came after oil prices slid further, impacting global markets and spiking demand for the safe haven assets even in the face of Japan’s new negative interest rate policy.

Click Here For More Market Exclusive Updates & Analysis

Yen gains momentum

USD/JPY fell by 0.31% to 120.66 today, after touching a session low of 120.36. The currency had witnessed a sharp decline after the Bank of Japan adopted negative interest rates, but is now reversing. Stock markets across Asia and Europe fell in response to softening oil prices.

Meanwhile, the euro also traded higher against the U.S. dollar, up by 0.27% to 1.0917. The unemployment rate for December is scheduled to be released today in the Eurozone. It is estimated that the jobless rate will continue to be at 10.5%, little changed from November’s low.

Apart from this, Spain, the fourth largest economy in Eurozone has posted a record high jobless rate for the first time in three months. Spain’s Employment Ministry published a note where it said that the number of jobless people rose by 57,200 in January, which is below the forecast of an increase of 71,200. The country’s jobless count declined by 55,800 back in December.

At the same time, weakness in the dollar continues from a contraction in manufacturing activity in the US in January. The Institute for Supply Management reported that the purchasing managers’ index (PMI) stood at 48.2 in January versus 48.0 in December. Other than this, the Commerce Department had reported no change in the personal spending rate, contrary to expectations of an increase of 0.1%. However, personal income was up by 0.3%, better than the estimates of a 0.2% rise.

Back in China, economic data remained uninspiring as factory activity shrank to 49.4 from 49.7 in December, reflecting a decline for the sixth time in a row. Elsewhere, GBP/USD was in negative territory, sliding 0.56% to 1.4352. All eyes are set on Bank of England’s monetary stance during its meet on Thursday.

Story continues below

Movers and Shakers: the Week so Far in Biotech

By
Jennifer Aldershot
-
biotech

It’s been a pretty strange start to the month in biotech. Companies with seeming upside catalysts have sold off, and institutional money is pouring into stocks that wider markets have hammered over the last few months. Of course, this latter situation might just be the smart money doing its thing – picking up discounted exposures in the wake of wider market weakness. Here are two companies that fall into these categories so far this week.

Click Here For More Market Exclusive Updates & Analysis

Aquinox Pharmaceuticals Inc. (NASDAQ:AQXP)

Small cap biotech investors will likely already know this company. In August last year, and based on the release of some promising phase II data in a bladder pain trial, it’s stock rocketed from just shy of $2 a share to intraday highs of $56, then collapsed to $18 at close. Since then, it’s gradually trended back down towards it’s pre-rally levels, and in line with the rest of the biotech space (and wider markets), lost nearly 40% of its market capitalization during the first few weeks of the year.

As January drew to a close, however, Aquinox volume picked up as the company released the minutes from a December meeting with the FDA to discuss the protocol of a pivotal trial for its lead – AQX-1125 – and it came to light that multi billion-dollar healthcare hedge fund Baker Brothers Advisors had built on their exposure to the company. The fund’s holding now sits at close to 45% of Aquinox’s outstanding shares, or 7.28 million shares.

The FDA meeting minutes were mixed as far as sentiment is concerned. The press release announcing them contained a lot of jargon, but essentially it says that the company is still figuring out how best to conduct the trial. It wants to weight it towards men, but this brings complications from a data collection perspective, so the FDA has stated it may require an expanded trial, or additional phase II data. This could be expensive, and could drag out any potential approval timeframe. With a little over $109 million cash on its balance sheet, an expanded trial (and the cost associated with it) likely wouldn’t be an issue, but it just means a position in the company would be more of a long hold than a short term speculative allocation. For Julian and Felix Baker, this doesn’t look to be an issue. For the average investor, however, it may not be so attractive.

Neos Therapeutics, Inc. (NASDAQ:NEOS)

It seems that every few weeks we return to Neos. The company will open Tuesday’s session at $10.88 – a 20% decline on it’s week open and a 25% discount to it’s 2015 close. The decline comes despite Neos announcing just last week that the FDA had approved its lead clinical candidate, Adzenys XR-ODT, for an ADHD indication in children six years and above. The approval opens up a market that analysts expect will reach $7.1 billion by 2017, and currently contains some household name therapies, such as Novartis AG (NYSE:NVS) Ritalin. It’s an extended release treatment, the only one of its kind in the space, meaning it has the advantage of reduced dosing frequency requirements over current SOC, which will bolster Neos’ sales pitch when it sets its team loose on US physicians (commercialization expected sometime during the second quarter of this year).

So why the decline? Well, the company is strapped for cash, and loses nearly $10 million a quarter on practically non existent revenues (circa $200,000 at last count). In order to fund the commercialization of its ADHD drug, it needs to raise money, and is doing so through a just-announced secondary offering. We don’t yet know how much Neos will price its offering at, but we know the company is targeting a $69 million draw, which will likely dilute the holdings of current investors.

This paints Neos as a bit of a conundrum from a value perspective. On one hand, the company is trading at a discount to historic prices and just got an approval for a unique drug in a huge market.

On the other, it’s got a lot of work to do if it is to successfully launch the drug, and even more before it can sure up its bottom line, and work is costly. The takeaway? One to watch, but warily.

Story continues below

Revlon Inc (NYSE:REV) Might Be On The Verge Of Major Restructuring

By
-

Stiff competition in the beauty industry and the pressure from Revlon Inc (NYSE:REV)’s largest shareholder, Ron Perelman, are the leading factors impacting the possible restructuring of the company. Perelman recently made public his intention to start searching for a strategic alternative for the company. The above factors might not signify sufficient reasons, but struggle in financial growth by Revlon is the main factor towards restructuring. This company experienced a lackluster performance between January and September in 2015 stating currency headwinds as being the major factor in this slowdown.

Revlon has faced stiff competition from both L’Oreal SA (EPA:OR) and, Estee Lauder Companies Inc (NYSE:EL) which are much bigger companies with substantial resources for research and marketing. This gives them the ability to expand into newer geographical areas while also exploring more modern products. L’Oreal recently introduced its first wearable, which can detect ultraviolet rays whenever a user’s skin is exposed. It also spent approximately $1.0 billion in research and development during the year 2014. Estee Lauder on the other hand recently introduced an extensive portfolio of new products.

The competition has been tough, but L’Oreal and Estee Lauder are earning much more in comparison to Revlon. L’Oreal, for instance, had $30 billion in revenues for the year 2014. Estee Lauder, on the other hand, had $10 billion while Revlon only managed around $2 billion.

Revlon has been trying to maintain its identity and stay in the competition. Some of the strategic moves the company has tried include: Revlon acquired Colomer Group in 2013, Revlon exited China and Venezuela after facing loss and unprofitable business respectively, Revlon acquired a fragrance business in the U.K, in 2015 Revlon launched its first new fragrance label know as ‘Love is On’. While these are great strategic moves for the company they fail to to be seen on the bottom line of the balance sheets.

Perelman has been noted to attempt an acquisition of the remaining stake in the company while still undervalued. The price estimate for Revlon’s stock is $34. This is almost a 15% premium to the current market price. Most analysts have stated that if Revlon is given the right leadership and direction, it has a significant potential for future growth. This is what Perelman might be planning to do.

Story continues below

Alcoa (NYSE:AA) Inducts Three New Directors to Its Board

By
Carol Harper
-
Alcoa Inc (NYSE:AA)

Alcoa Inc (NYSE:AA) disclosed today that it would induct three new people onto its board of directors effective February 5. These are Ulrich ‘Rick’ Schmidt, John Plant, and Sean Mahoney. The aluminum maker said that the appointments would strengthen the company and add value and experience in the automotive and aerospace fields to its board. The appointment comes ahead of the separation of the company into two entities, scheduled to occur in the second half of the year.

Click Here For More Market Exclusive Updates & Analysis

As a result of the current announcement, Alcoa’s board would be expanded to 15 directors. The company also indicated that it struck a deal with Elliott Management affiliates to support its nomination of directors at the annual meeting of shareholders. Mahoney would be included in the firm’s nomination of directors for election at the meeting.

On the other hand, the other two directors, Schmidt and Plant would be included along with the directors whose terms expire in the next two years, i.e. 2017 and 2018. Elliott Management’s Senior Portfolio Manager, Dave Miller, said that the company was going in the right direction as it was moving forward with its separation. He said that it was a pivotal moment and presented an opportunity to create considerable shareholder value. He felt that he was happy to work constructively with the leading aluminum manufacturer.

Management Comments

Alcoa’s Chairman and CEO, Klaus Kleinfeld, said that as the company was ready to split into two companies, it has been working actively to ensure both of them have world-class directors on their boards. He said that everyone in the new directors list was a high caliber executive as they have established proven track records.

Alcoa’s CEO said that all the new directors are bringing in their valuable skills that are relevant to the markets that the company has been focusing on like automotive and aerospace. The company is looking to gain their expertise to make the two independent firms a success.

Story continues below

Janney Upgrades First Cash Financial (NASDAQ:FCFS) To A Buy

By
Andy Parker
-

Analysts at Janney have demonstrated their faith in the future of First Cash Financial Services Inc (NASDAQ:FCFS), upgrading their rating on the stock to Buy from Neutral in their latest note on the company. The development follows First Cash’s fourth quarter results that would have been strong had it not been for adverse forex impact. The analysts are of the view that there is demand for First Cash’s products and services and that the company is poised to deliver better results going forward.

Click Here For More Market Exclusive Updates & Analysis

4Q earnings highlight

First Cash reported adjusted EPS of $0.73 last quarter. That compared with the consensus estimate of $0.76. The results in the quarter were largely hampered by a stronger U.S. dollar versus a weaker Mexican currency.

2016 guidance

For 2016, First Cash is looking for EPS in the band of $2.20 to $2.40. That’s short of Janney’s estimated EPS of $2.78 and the consensus estimate of $2.70. Once again though, Janney is of the opinion that the adverse forex environment was the greatest impediment for the firm. As such, First Cash still acknowledges that forex will remain a headwind in the near-term, but should ease with time.

Nevertheless, Janney doesn’t believe that the forex issue is a serious challenge that should keep anyone on the sidelines. That explains why the firm also boosted its fair value estimate for the stock for the next 12 months to $45 from $44. Janney’s fair value estimate signals more than 50% upside potential from the prevailing stock price.

Citing the near-term impact of adverse forex fluctuation, Janney has trimmed its 2016 EPS estimate for First Cash to $2.36 from $2.78. The firm has also introduced 2017 EPS estimate of $2.83.

First Cash recently invested $45 million to acquire hundreds of pawn stores in Guatemala, El Salvador and Mexico and the assets are expected to contribute to growth this year.

Story continues below

Wedbush Upgrade Rating For Select Comfort (NASDAQ:SCSS) To Outperform From Neutral

By
Andy Parker
-

Wedbush analysts have upgraded Select Comfort Corp. (NASDAQ:SCSS), to outperform from neutral stating the company has a much brighter future than they had previously thought. SCSS’s 12-month price target has been reiterated at $23. The stock is currently changing hands in the vicinity of $21.

Unique products

One of the reasons Wedbush is positive about the prospects of Select Comfort is that it believes that the company has clearly differentiated products.  As such, the company stands a better chance of improving sales even in the highly commoditized industry that it is playing in. Among other things, Wedbush cites SCSS’s air-chamber mattresses that it says are unique.  Because of unique products, SCSS is better placed to sell more mattress products than rivals, especially the larger mattress producers.

Checks reveal improving trend

The ERP implementation by Select Comfort caused challenges that lowered customer satisfaction ratings. However, analysis by Wedbush shos that SCSS is quickly recovering from the unfortunate development, especially helped by increased marketing campaigns and new satisfaction ratings by Consumer Reports and J.D. Power.

Opportunity amid challenge

Wedbush sees opportunity to buy SCSS when the issues of ERP are still around, because the negative sentiments have served to make the stock cheaper to own. In terms of operating performance, Wedbush sees SCSS being able to achieve its 2016 guidance, pushing shares higher.

Estimates

Based on its assessment of SCSS on multiple fronts, Wedbush has increased its 2016 EPS estimate for the company to $1.53 from $1.43. SCSS’s new marketing efforts should contribute to better results in 2016.

Risk to estimate

As much as Wedbush remains optimistic on the prospects of Select Comfort, it does believe that some factors beyond the control of the company can impact performance, possibly leading to the company missing or exceeding its estimates. Such factors include marketing effectiveness, execution, rising expenses and discounts that may lower gross margins.

Story continues below
1...14,59414,59514,596...14,629Page 14,595 of 14,629

EDITOR PICKS

POPULAR POSTS

POPULAR CATEGORY

© Market Exclusive 2019