The Zacks Analyst Blog Highlights:Wendy's, McDonald's, Yum! Brands, Burger King Worldwide and Novo Nordisk

CHICAGO, Oct. 3, 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 Wendy's Co.  (Nasdaq: WEN-Free Report), McDonald's Corp. (NYSE: MCD-Free Report), Yum! Brands Inc. (NYSE: YUM-Free Report), Burger King Worldwide Inc. (NYSE: BKW-Free Report) and Novo Nordisk (NYSE: NVO-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:

Wendy's Downgraded from Outperform

We are reverting to a Neutral recommendation on restaurant company The Wendy's Co.  (Nasdaq: WEN-Free Report) from Outperform on mixed second-quarter 2013 results.

Why Back to Neutral?

While Wendy's second-quarter 2013 adjusted earnings, reported on Aug 7, 2013, grew year over year, mainly through effective cost control measures, the sales scenario remained sluggish. Sales missed the Zacks Consensus Estimate and grew just 0.7% year over year.

Comps were also soft in the quarter. Company-owned comps nudged up 0.4% in the quarter while franchised units saw a 0.3% rise in comps. The removal of breakfast items at certain restaurants marred comps by about 1%.

Restaurant companies are highly exposed to fluctuation in food costs. Beef represents almost 20% of Wendy's total food cost. Higher beef and chicken costs are expected to be more pronounced in the second half of 2013 and thus might restrict margin expansion.

Further, Wendy's will incur significant capital expenditure (capex) in the coming years in a bid to boost the re-imaging program. This will lead to lower free cash flow. The company estimates expenses of about $440 million–$500 million for store overhaul and openings from 2013 to 2015.

Although Wendy's has signed franchise development agreement for international growth, its peers – McDonald's Corp. (NYSE: MCD-Free Report) and Yum! Brands Inc. (NYSE: YUM-Free Report) – operate on a much larger scale. Also, Wendy's operates at a disadvantage relative to burger behemoths McDonald's and Burger King Worldwide Inc. (NYSE: BKW-Free Report), the scale of which supports greater advertising strength.

We believe the positive impact of multi-year turnaround plan, international expansion, extensive refurbishment of units, focus on franchising and dividend hike are reflected at current levels and there is little room for further upside. Wendy's currently has a Zacks Rank #3 (Hold).

NVO's Diabetes Portfolio Update

Novo Nordisk (NYSE: NVO-Free Report) has a strong presence in the diabetes care market. The company has one of the broadest diabetes portfolios in the industry. The company is working hard to develop its diabetes pipeline.

Novo Nordisk presented new data from a phase III study (DUAL I) on its type II diabetes candidate, IDegLira, at the annual meeting of the European Association for the Study of Diabetes (EASD). IDegLira is a combination of insulin degludec, Tresiba and Victoza, the once-daily human glucagon-like peptide-1 (GLP-1) analogue.

The DUAL I study showed a statistically significant reduction in blood sugar levels (HbA1c) compared to Tresiba or Victoza alone, with no weight gain and a low rate of hypoglycemia.

The effects of IDegLira on fasting and postprandial glucose levels were also positive, resulting in a substantial overall improvement in glycemic control versus Tresiba or Victoza alone. Data from the study revealed that  less than 7% sugar level reduction was observed in 81% patients treated with IDegLira, 60% patients treated with Victoza and 65% patients treated with Tresiba.

The DUAL program consists of two phase IIIa studies, namely, DUAL I and DUAL II. DUAL II demonstrated that patients can realize benefits from each of the components in the combination product and reconfirmed the competitive profiles of Tresiba and Victoza.

Novo Nordisk's Diabetes Care segment recorded sales growth of 14% in the second quarter of 2013. Modern insulins generated strong revenues (up 15%) driven by NovoRapid (up 15%) and Levemir (19%). Victoza witnessed sales growth of 32%.

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 WEN - FREE

Get the full Report on MCD - FREE

Get the full Report on YUM - FREE

Get the full Report on BKW - FREE

Get the full Report on NVO - 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
support@zacks.com
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.



RELATED LINKS
http://www.zacks.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.