The Zacks Analyst Blog Highlights: Priceline, Groupon, Bayer, Johnson & Johnson and Alexion Pharmaceuticals

Feb 21, 2014, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Feb. 21, 2014 /PRNewswire/ -- 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 Priceline (Nasdaq: PCLN-Free Report), Groupon (Nasdaq: GRPN-Free Report), Bayer (OTC:BAYRY-Free Report), Johnson & Johnson (NYSE: JNJ-Free Report) and Alexion Pharmaceuticals, Inc. (Nasdaq: ALXN-Free Report).


Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Thursday's Analyst Blog:

Priceline Triumphant Again, Groupon Mixed

A tale of two Internet service firms -- both Priceline (Nasdaq: PCLN-Free Report) and Groupon (Nasdaq: GRPN-Free Report) reported Q4 earnings after the bell Thursday. While the travel booking website company put together a healthy beat on the top and bottom lines, the daily deals firm topped revenue estimates but was woefully short on earnings, based on charges we accounted for.

Analysts had expected Groupon to come close to profitability but reported EPS of -$0.12 (actual, after stock-based compensation). The company was shooting for its third consecutive positive earnings surprise, but it was not to be. Worldwide mobile transaction mix was up 10% in the quarter, however, and Groupon's revenues are up 20% year over year.

Priceline, on the other hand, continues to please investors with beating analyst estimates, as it has done for at least the last six quarters. Earnings of $8.04 per share beat the Zacks Consensus Estimate by 5%, and revenues of $1.54 billion in the quarter topped our expectations of $1.52 billion. Earnings also rose 25% year over year.

Groupon did give investors some things to look forward to in 2014, however: acquiring Korean e-commerce firm Ticket Monster and online fashion retailer ideeli should be accretive to Groupon's business. According to the 12 analysts currently following the company, 2014 should be its first year of profitability, at 8 cents per share for the full fiscal year.

Where Groupon saw weakness in the quarter was outside of North America and Europe: the Rest of World segment was down 11%. Also, with product head Jeffrey Holden recently having stepped down, perhaps investors are anticipating some tougher sledding ahead. Perhaps this is why, after initially trading up in the after-market, GRPN shares are down over 10%.

No such drama for Priceline; consistency almost always pays off. Shares of PCLN are up around 1.5% after hours, and now trade at a pretty hefty $1283.00 per share. Priceline is a Zacks Rank #2 (Buy) stock, and has grown nearly 83% in the past year.

Pipeline Progress at Bayer

Pipeline updates are highly awaited events in the pharma/biotech sector as they play an important role in deciding whether or not to invest in a particular company. Pipelines are of prime importance as far as pharma/biotech companies are concerned. These companies spend a significant amount in advancing their pipelines.

Earlier in the week, the HealthCare segment at Bayer (OTC:BAYRY-Free Report) announced the initiation of the phase III EINSTEIN CHOICE study (n=2,850) on Xarelto. The study will evaluate two doses (10 mg or 20 mg) of Xarelto versus acetylsalicylic acid (ASA) for the long-term, secondary prevention of symptomatic venous thromboembolism (VTE), including deep vein thrombosis (DVT) and pulmonary embolism (PE).

The EINSTEIN CHOICE study will evaluate whether once-daily Xarelto is superior to ASA in the prevention of fatal or non-fatal symptomatic recurrent VTE, in patients who have finished anticoagulant treatment for 6 to 12 months for their index DVT or PE event.

We note that Xarelto is jointly developed by Bayer and Johnson & Johnson (NYSE: JNJ-Free Report). The drug is marketed by Johnson & Johnson in the U.S. and by Bayer outside the U.S. Xarelto is approved for several indications including stroke prevention in nonvalvular atrial fibrillation, DVT, PE and reduction of the risk of recurrent DVT and PE. Bayer recorded Xarelto sales of €259 million for the third quarter of 2013.

Although Bayer and Johnson & Johnson has progressed well with Xarelto in several indications, they have really struggled with Xarelto in the acute coronary syndrome (ACS) indication in the U.S. Last week, the U.S. Food and Drug Administration (FDA) issued complete response letters (CRLs) to Xarelto's supplemental New Drug Applications (sNDA) in combination with standard antiplatelet therapy to reduce the risk of thrombotic cardiovascular events and stent thrombosis in patients suffering from ACS. The news came as a huge dissapoinment for both the companies. Bayer and Johnson & Johnson have earlier been subject to a series of setbacks regarding the ACS indication of Xarelto in the U.S.

Bayer currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Alexion Pharmaceuticals, Inc. (Nasdaq: ALXN-Free Report), which holds a Zacks Rank #1 (Strong Buy).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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