CHICAGO, Nov. 14, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Yum! Brands Inc. (NYSE:YUM-Free Report), GlaxoSmithKline (NYSE:GSK-Free Report), Prosensa (Nasdaq:RNA-Free Report), Bayer (OTC:BAYRY-Free Report) and Johnson & Johnson (NYSE:JNJ-Free Report).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday's Analyst Blog:
Yum!s China Woes Continue
Louisville, Kentucky-based famous restaurateur Yum! Brands Inc. (NYSE:YUM-Free Report) yet again witnessed a decline in its China Division's comparable sales (comps) for the month of October 2013. China's comps have dropped 5% in October as a result of a 7% fall in the same at KFC brand. However, the rate of decline moderated from the 11% shortfall reported in September.
On the other hand, Yum!'s Pizza Hut Casual Dining registered 10% growth in China in October, better than the September comps growth of 6%.
In Dec 2012, Yum! Brands faced an allegation regarding the quality of chicken supplied to its KFC units in China. Although food safety regulators in Shanghai cleared Yum! Brands, the incident shattered consumer confidence about the quality of food offered by this U.S. restaurateur leading to a steep fall in its sales results in China. The outbreak of avian flu in China in April further added to the company's woes and marred China Division sales performance.
China, which once played a pivotal role in Yum! Brands' growth story over the past few years, began to witness lackluster sales performance since fourth-quarter 2012 due to the above setbacks.
The company posted an 11% decline in third-quarter comps, reported on Oct 8, 2013, for its China Division which was much lower than a 6% rise in comps in the year-ago quarter. Quarterly fall in comps was caused by a 14% drop in the same at KFC owing to the continued unfavorable impact of the poultry supply issue, partially offset by a 5% rise in comps at Pizza Hut Casual Dining.
Poor sales performance at KFC China in September compelled YUM! Brands to state that the China comps will continue to be down in the fourth quarter. However, management expects its business to improve from 2014 onwards driven by its new sales-driven initiatives.
Our Take
Even though the Zacks Rank #4 (Sell) company has undertaken quality assurance measures, marketing campaigns and various promotional offers, it will take some time to completely recover. Further, all these initiatives will likely result in incremental expenses that will weigh on the bottom line. A lower earnings outlook for 2013 remains an overhang.
Glaxo's Heart Candidate Disappoints
GlaxoSmithKline (NYSE:GSK-Free Report) announced disappointing top-line data from a phase III study on its chronic coronary heart disease (CHD) candidate, darapladib. Investors reacted negatively to the news with the stock price falling approximately 1.6%.
The randomized, placebo-controlled, double-blind, parallel group, multi-centre, event-driven STABILITY study (STabilisation of Atherosclerotic plaque By Initiation of darapLadIb TherapY) is the first of two phase III studies on darapladib. The STABILITY study, which enrolled more than 15,000 patients, assessed the use of darapladib in combination with current standard of care (statin, aspirin and blood pressure treatments) versus placebo plus standard of care.
The study failed to meet its primary endpoint. The primary endpoint was time to first occurrence of any major adverse cardiovascular event (MACE) including cardiovascular death, nonfatal myocardial infarction, and nonfatal stroke. Full data from the STABILITY study will be presented in 2014 at a scientific meeting.
Meanwhile, the second phase III study, SOLID-TIMI 52 (n >13,000), evaluating darapladib in patients suffering from acute coronary syndrome is expected to be completed in 2014.
Darapladib, which became a part of Glaxo's portfolio through the Aug 2012 acquisition of Human Genome, was one of the most interesting late-stage candidates in Glaxo's pipeline. With the candidate failing in a big study, expectations for success in the second study, SOLID-TIMI 52, will be low.
Other Setbacks
Over the last few months Glaxo has suffered quite a few late-stage pipeline setbacks. In Sep 2013, Glaxo had announced negative data from a phase III study on drisapersen. Glaxo is developing drisapersen in collaboration with Prosensa (Nasdaq:RNA-Free Report) for the treatment of patients suffering from Duchenne muscular dystrophy (DMD).
Glaxo's MAGE-A3 cancer immunotherapeutic also failed to meet its first co-primary endpoint in the phase III DERMA study.
We believe that positive data from the STABILITY study would have supported regulatory filings and increased Glaxo's chances of gaining approval for darapladib. This would have provided the provided a much needed boost to Glaxo's revenues.
Glaxo carries a Zacks Rank #3 (Hold). Right now, Bayer (OTC:BAYRY-Free Report) and Johnson & Johnson (NYSE:JNJ-Free Report) look attractive. Both carry a Zacks Rank #2 (Buy).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on YUM - FREE
Get the full Report on GSK - FREE
Get the full Report on RNA - FREE
Get the full Report on BAYRY - FREE
Get the full Report on JNJ - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.
Share this article