CHICAGO, Oct. 14, 2013 /PRNewswire/ -- Zacks Equity Research highlights Valeant Pharmaceuticals (NYSE: VRX-Free Report) as the Bull of the Day and Uni-Pixel (Nasdaq: UNXL-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Bristol-Myers Squibb Company (NYSE: BMY-Free Report), Sanofi (NYSE: SNY-Free Report) and Pfizer Inc. (NYSE: PFE-Free Report).
Here is a synopsis of all five stocks:
Looking for a healthcare play with strong consumer products growth and an expanding pharmaceutical pipeline? Then set your sights on Canada's Valeant Pharmaceuticals (NYSE: VRX-Free Report), whose recently completed acquisition of Bausch & Lomb makes it the biggest player in ophthalmology and general eyecare products.
Valeant is a specialty pharmaceutical company with many hundreds of products across dermatology, dentistry, neurology, and ophthalmology. Its early and late-stage drug candidates have unique formulations and mechanisms of action including retigabine for the treatment of epilepsy and pain, taribavirin of the treatment of chronic hepatitis C, and several dermatology candidates for the treatment of rosacea, acne, and dermatological fungus.
The company has been primarily built through a series of mergers and acquisitions over the years. It operates in two primary geographical segments, Developed Markets and Emerging Markets. Developed Markets includes U.S. pharma/OTC in dermatology, aesthetics, dentistry, podiatry, ophthalmology, neurology/other, and Canada/Australia/NZ. Emerging Markets includes branded generics/OTC in Central/Eastern Europe, Latin America, SE Asia/Africa.
This growth strategy is producing over 50% sales growth and 40% EPS growth, while trading under 13X next year's $8.66 consensus. And that's why the stock keeps steadily climbing since May. It's that kind of stable, global growth that some investors can't get enough of.
Uni-Pixel (Nasdaq: UNXL-Free Report) designs and develops functional electronic conductive films and durable wear resistance films used in sensors and display applications for consumer and industrial products. The $200 million company had virtually no revenues in 2012 and is projected to have only $21 million this year.
Uni-Pixel's patented technology, the Time Multiplexed Optical Shutter (TMOS), can be used in mobile phones, digital cameras, notebook computers, televisions, as well as display and interactive technologies in the energy, transportation and entertainment industries.
The future of touch, sensor, and gesture technologies looks bright, with Oppenheimer projecting the consumer gesture control market to be the fastest growing segment as it expands fivefold from $850 million in 2013 to over $4 billion by 2017. That's a compound annual growth rate of 50%!
But the recent backslide in sales at UNXL has forced analysts to cut 2013 earnings estimates in the past two months from an expected gain of $0.46 to a loss of 5 cents. And just last week, that profit outlook got cut in half again with the consensus now at a loss of 10 cents for the year.
Bristol-Myers Upgraded from Underperform
We are reverting to a Neutral recommendation on Bristol-Myers Squibb Company (NYSE: BMY-Free Report) from Underperform as we believe that the current price reflects all the negative news. Consequently, there is limited scope for stock price appreciation at Bristol-Myers. The stock carries a Zacks Rank #3 (Hold) in the short run.
Why Back to Neutral?
Bristol-Myers reported earnings (excluding special items) of 44 cents per share in the second quarter of 2013, down 9% from the year-ago figure. The decline was due to reduced sales of Plavix and Avapro. Both drugs, co-developed with Sanofi (NYSE: SNY-Free Report), went off patent in the U.S. last year.
The genericization of Plavix and Avapro in the U.S. has resulted in a significant loss of revenues. The modest revenues reported by the company in the second quarter of 2013 were primarily due to lower sales of both drugs.
Avapro/Avalide recorded a 52% decline in global net sales to $56 million in the second quarter of 2013. Global net sales of Plavix plummeted 94% to $44 million in the second quarter of 2013. U.S. sales of the drug plunged 97% to $18 million. We believe that Bristol-Myers has entered a challenging period following Plavix's genericization.
Following the lackluster performance, the company trimmed its 2013 guidance. Bristol-Myers now expects adjusted earnings for 2013 in the range of $1.70-$1.78 (old guidance: $1.78–$1.88). The company slashed its outlook reflecting negative currency movement and the recall of Fervex, a local OTC product in France and other international markets. Bristol-Myers also cut its revenue guidance. Moreover, anti-clotting drug, Eliquis, co-developed with Pfizer Inc. (NYSE: PFE-Free Report) also performed disappointingly in the second quarter of 2013.
We believe the current price incorporates all the negative news and are reverting to a Neutral recommendation on the stock.
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