The Zacks Analyst Blog Highlights: Zumiez, Mylan, AbbVie, Santarus and Jazz Pharmaceuticals
CHICAGO, May 23, 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 Zumiez Inc. (Nasdaq: ZUMZ), Mylan Inc. (Nasdaq: MYL), AbbVie Inc. (NYSE: ABBV), Santarus, Inc. (Nasdaq: SNTS) and Jazz Pharmaceuticals (Nasdaq: JAZZ).
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Here are highlights from Wednesday's Analyst Blog:
Zumiez Expected to Beat Earnings Ests
We expect Zumiez Inc. (Nasdaq: ZUMZ), a Wash.-based retailer of sports-related teen apparel, to beat expectations when it reports first-quarter fiscal 2013 results on May 23.
Why a Likely Positive Surprise?
Our proven model shows that Zumiez may beat earnings because it has the right combination of 2 key components.
Positive Zacks ESP: Zumiez currently has Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of +8.33%. This is because the Most Accurate Estimate stands at 13 cents per share, while the Zacks Consensus Estimate is pegged at 12 cents.
Zacks #2 Rank (Buy): Note that stocks with a Zacks Rank #1, 2 and 3 have higher chances of beating earnings. The Sell rated stocks (#4 and 5) should never be considered going into an earnings announcement.
The combination of Zumiez's Zacks Rank #2 (Buy) and Earnings ESP of +8.33% makes us confident of a positive earnings beat on May 23.
What's Driving the Better-than-Expected Earnings?
Zumiez's strategy relies on offering action-sports merchandise focused on young men and women in the age of group of 12–24, which has enabled the company to carve a distinct niche for itself. Furthermore, the company's stores are strategically located in busy areas of the mall, such as food courts, movie theatres and music/game stores, which are frequently visited by its target customers. We also believe that Zumiez's initiatives such as store opening programs and the acquisition of Blue Tomato has provided it a solid platform to capitalize on the emerging opportunities.
The company has surpassed the Zacks Consensus Estimate in the trailing 4 quarters with an average surprise of approximately 19.6%.
Generic Launches at Mylan Continue
Mylan Inc. (Nasdaq: MYL) recently announced the launch of its generic version of AbbVie Inc.'s (NYSE: ABBV) cholesterol management drug, TriCor (fenofibrate, 48 mg and 145 mg tablets). Mylan launched the drug after receiving final approval from the US Food and Drug Administration regarding the Abbreviated New Drug Application (ANDA) for its generic version of the drug.
We remind investors that Mylan is not the first to enter the US market with its generic version of TriCor. In Nov 2012, Lupin Ltd. had launched its generic version of TriCor. According to IMS Health, TriCor (48 mg and 145 mg) generated US revenues of approximately $1.2 billion for the 12 months ending Mar 31, 2013.
Mylan has a strong generic product portfolio and pipeline. As of May 17, 2013, Mylan had 178 ANDAs pending FDA clearance, targeting $83.1 billion in sales annually. Mylan believes that about 34 of these pending ANDAs are first-to-file opportunities, representing $22.4 billion in branded sales. The revenue figures are as per IMS Health for the 12 months ending June 30, 2012.
Mylan carries a Zacks Rank #3 (Hold). Mylan's geographic reach and product depth, along with a robust generic pipeline, are contributing to its overall growth.
However, we remain cautious of the company's lackluster performance in Europe, the Middle East and Africa. Additionally, as most of the large branded drugs are due to lose patent exclusivity within the 2017–2018 period, we have little visibility on the growth prospects of generic companies like Mylan beyond that timeframe.
Currently, companies like Santarus, Inc. (Nasdaq: SNTS) and Jazz Pharmaceuticals (Nasdaq: JAZZ) look attractive with both being Zacks Rank #1 (Strong Buy) stocks.
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