CHICAGO, June 28, 2012 /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 Delta Air Lines Inc. (NYSE:DAL), United Continental Holdings Inc. (NYSE:UAL), Southwest Airlines Co. (NYSE:LUV), AstraZeneca (NYSE:AZN) and Forest Laboratories (NYSE:FRX).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Wednesday's Analyst Blog:
Delta Foresees Robust 2Q
The second largest U.S. airline, Delta Air Lines Inc. (NYSE:DAL), expects second quarter unit revenue (or revenue per available seat miles) to grow 8% year over year thanks to the growing business travel demand and flight expansion in the New York market. The addition of novel features to its services as well as introduction of new products is also expected to boost revenue.
Due to the drop in fuel prices, the company foresees $155 million loss from fuel hedging strategies in the second quarter. Delta Air Lines was 70% hedged for the second quarter at a jet fuel price of $3.05–$3.40 per gallon using collars and call spreads. As a result, the company expects to record operating loss in the quarter with negative 1% margin after accounting for the hedges and other special charges.
However, on a non-GAAP basis, the company still expects operating margin in the range of 8–10% and consolidated unit cost, excluding fuel, to grow 3-4% year over year. Additionally, the company expects both domestic and international flying to decline 1–2% year over year.
Now, the company estimates fuel price of $3.37 per gallon for the ongoing quarter, up from the previous forecast of $3.28 per gallon attributable to hedge losses that were settled in May and June.
For the second quarter, the Zacks Consensus Estimate for Delta remains unchanged at 80 cents over the last 7 days but fell by a penny in the last 30 days. The estimate represents a massive growth of 84.88% from the year-ago quarter.
Further, Delta Air Lines, which competes strongly with United Continental Holdings Inc. (NYSE:UAL) and Southwest Airlines Co. (NYSE:LUV), continues to have a healthy balance sheet. The company expects to exit the quarter with $5.3 billion in unrestricted liquidity including $3.5 billion in cash and short-term investments, and $1.8 billion in undrawn revolving credit facilities.
We are currently maintaining our long-term Neutral recommendation on Delta Air Lines. For the short term, the stock retains a Zacks #3 (Hold) Rank.
Good News for AstraZeneca
Good news flowed in atAstraZeneca (NYSE:AZN) from Europe when the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended the approval of AstraZeneca's Zinforo (ceftaroline fosamil) in the EU.
The CHMP recommended the approval of Zinforo for treating adults with complicated skin and soft tissue infections (cSSTI) or community acquired pneumonia (CAP). A final decision from the European Commission (EC) is expected in the coming months.
The positive opinion on Zinforo was based on positive data from four phase III trials - CANVAS 1 and 2 (cSSTI) and FOCUS 1 and 2 (CAP). AstraZeneca has submitted marketing applications in several countries and is planning further submissions this year for Zinforo.
We note that in 2009, Forest Laboratories (NYSE:FRX) out-licensed co-exclusive development and exclusive commercial rights to Zinforo in all territories except the US, Canada and Japan. In March 2011, Forest launched its version of ceftaroline fosamil under the trade name Teflaro in the US. The company reported Teflaro sales of $22.4 million for the 12 months ending March 31, 2012.
Neutral on AstraZeneca
We are encouraged by AstraZeneca's focus on high-potential emerging markets and are pleased with its effort to drive the bottom line through cost-cutting initiatives and share buybacks.
However, we remain concerned about the generic competition faced by the company's key products. In 2011, the company lost revenues worth almost $2 billion to generic competition. The weak late-stage pipeline coupled with the slow Brilinta uptake also bothers us. We currently have a Neutral recommendation on AstraZeneca. The stock carries a Zacks #3 Rank (Hold rating) in the short run.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
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: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which 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 at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
SOURCE Zacks Investment Research, Inc.