The Zacks Analyst Blog Highlights: Edwards Lifesciences, Medtronic, Abaxis, Hologic and Melco Crown Entertainment
CHICAGO, Aug. 14, 2014 /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 Edwards Lifesciences Corp. (NYSE:EW-Free Report), Medtronic Inc. (NYSE:MDT-Free Report), Abaxis, Inc. (Nasdaq:ABAX-Free Report), Hologic Inc. (Nasdaq:HOLX-Free Report) and Melco Crown Entertainment Limited (Nasdaq:MPEL-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday's Analyst Blog:
What Makes Edwards Lifesciences (EW) a Buy?
Zacks Investment Research upgraded Edwards Lifesciences Corp. (NYSE:EW-Free Report) to a Zacks Rank #2 (Buy) on Aug 4, 2014.
Why the Upgrade?
Shares of this medical device major have rallied upward since it reported financial results for the second quarter of 2014 and subsequently hit a new 52-week high of $95.51 on Aug 7.
The company delivered strong second-quarter 2014 results with both top and bottom-line beats over the Zacks Consensus Estimate.
Adjusted earnings per share (EPS) came in at 88 cents beating the Zacks Consensus Estimate by 11 cents or a robust 14.3%. Earnings also exceeded the year-ago number of 84 cents by 4.8%. The earnings improvement came on the back of stronger-than-expected sales growth across all of the company's product lines.
Sales grossed $575.1 million, up 11.2% year over year (excluding the impact of foreign exchange fluctuations and the transcatheter heart valves sales return reserve, underlying growth was 10.5%), outpacing the Zacks Consensus Estimate of $546 million.
Throughout the second quarter, the company remained in the headlines owing to positive results for the SAPIEN 3 transcatheter valve; the launch of SAPIEN XT in the U.S.; and more recently, for receiving the FDA approval for its ClearSight noninvasive monitoring system. Management expects to gain substantially in its critical care product line aided by increased sales of Edwards' best-in-class monitoring technology, including the newest ClearSight system.
In May 2014, Edwards Lifesciences had agreed to settle all outstanding patent litigation with Medtronic Inc. (NYSE:MDT-Free Report), including cases related to Transcatheter Heart Valve (THV). As part of this settlement, Medtronic has made a one-time payment of $750 million to Edwards. In addition, Medtronic will also pay Edwards quarterly license royalty payments through April 2022. We believe this settlement is in the best interests of Edwards Lifesciences and will allow the company to continue its leadership position in the U.S. transcatheter aortic heart valve market.
Other Stocks to Consider
Edwards Lifesciences currently has $10.07 billion worth of market capitalization. Other stocks that are worth a look in the healthcare industry are Abaxis, Inc. (Nasdaq:ABAX-Free Report) and Hologic Inc. (Nasdaq:HOLX-Free Report). Both the companies carry a similar Zacks Rank #2.
Melco Crown Down to Strong Sell on Weak Q2
On Aug 12, 2014, Zacks Investment Research downgraded Melco Crown Entertainment Limited (Nasdaq:MPEL-Free Report) to a Zacks Rank #5 (Strong Sell) on disappointing second quarter results.
Why the Downgrade?
Last week, Melco Crown Entertainment posted weak second-quarter 2014 results, missing on both top and bottom line estimates. Adjusted earnings of 30 cents per share missed the Zacks Consensus Estimate of 37 cents by 18.9%. Further, earnings declined from the year-ago figure of 35 cents by 12.4%. The downside reflects lower-than-expected revenues.
In the quarter, net revenue declined 7.4% year over year to $1.20 billion and missed the Zacks Consensus Estimate of $2.59 billion by 9.4% due to lower group-wide rolling chip revenues, partially offset by improved mass market table games revenues.
The downside reflects slowdown in gambling in Macau as high-stake gamblers are curtailing spending due to a tepid Chinese economy. Additionally, a nationwide crackdown on corruption in China compelled Macau officials to impose restrictions on VIP gamblers to stop billions of dollars from being siphoned off illegally from mainland China to Macau. With the near-term outlook for gaming in Macau remaining bleak, we anticipate the pressure to persist for the company.
In fact, with the company's weak second quarter and the poor outlook on Macau, the 2014 consensus earnings estimate went down from $1.70 to $1.61 in the past 7 days and that for 2015 declined from $2.08 to $2.01, over the same time period.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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