Zacks Equity Research highlights Crocs, Inc. (Nasdaq: CROX) as the Bull of the Day and Amylin Pharmaceuticals, Inc. (Nasdaq: AMLN) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Texas Instruments (NYSE: TXN) and Biogen Idec, Inc. (Nasdaq: BIIB). Full analysis of all four stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all four stocks:
Bull of the Day:
Our Bull of the Day recommendation is for Crocs, Inc. (Nasdaq: CROX). Crocs business momentum remains stellar both domestically and internationally. This has led to eye-popping gains for CROX shares, which are up over 290% in the last twelve months. Even so, we believe the stock has further upside ahead because investor expectations are still too low for the company. Specifically, we expect Crocs to earn higher profit margins on its sales, and we are increasing our 2007 EPS estimate by $0.07 and our 2008 EPS estimate by $0.08. What’s more, the stock trades at a very reasonable P/E/G ratio of 1.1 times our 2007 EPS estimate. We think that CROX shares should trade at a larger premium to its long-term earnings growth rate. We maintain our Buy rating and increase our target price from $88 to $107.
Bear of the Day:
Our Bear of the Day recommendation is for Amylin Pharmaceuticals, Inc. (Nasdaq: AMLN), which is engaged in the discovery, development and commercialization of potential drug candidates for the treatment of diabetes, obesity and cardiovascular diseases. The top-line is being driven by sales of two diabetes drugs, Byetta and Symlin. Sales of both drugs were lower than expected in the most recent quarter due to heavy sampling and increased competition. We think the competitive landscape is only getting worse for Amylin, and we feel the name is overvalued. Amylin trades at 33x our 2010 EPS estimate of $1.36. This is a significant premium to the peer group. We would avoid the name. Our target is $36.
Texas Instruments (NYSE: TXN) updated its outlook for Q2. Revenue is expected to be between $3.36 billion and $3.51 billion, compared to prior guidance of $3.32 billion to $3.60 billion. Semiconductor revenue should be between $3.20 billion and $3.34 billion, compared to prior guidance of $3.14 billion to $3.40 billion. Education Technology revenue is expected to be between $160 million and $170 million, compared to prior guidance of $180 million to $200 million. Management sees the decline in Education Technology revenue offset by higher Semiconductor profitability. EPS [earnings per share] from continuing operation should be between $0.40 and $0.44. We have trimmed our Q2 EPS estimate by one cent to $0.43. We maintain our Hold rating and target price of $37.
We are now recommending investors hold their position in shares of Biogen Idec, Inc. (Nasdaq: BIIB). The core business is performing well, and Tysabri has re-launched in both the U.S. and several European countries. Additionally, Biogen's solid financial situation makes the company an attractive partner. However, the company's long-term situation is a bit unclear given the heavy reliance on two mature products in Rituxan and Avonex, and readjusted expectations for Tysabri. The company will need success with several mid- to late-stage pipeline candidates to return to impressive growth starting in 2009.
Get the full analysis of all four 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.
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