The Zacks Analyst Blog Highlights:Merck, United Continental Holdings, Delta Airline, Boeing and American Airlines Group
CHICAGO, Jan. 16, 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 Merck & Co (NYSE:MRK-Free Report), United Continental Holdings Inc. (NYSE:UAL-Free Report), Delta Airline Inc. (NYSE:DAL-Free Report), Boeing Co. (NYSE:BA-Free Report) and American Airlines Group Inc. (Nasdaq:AAL-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:
Strategy Update from Merck
The year 2013 was challenging for pharmaceutical company Merck & Co (NYSE:MRK-Free Report) with its erstwhile blockbuster drug, Singulair, losing exclusivity in the U.S. in early Aug 2012 and in the EU in Feb 2013. Merck also faced challenges in its diabetes portfolio with sales of its key drug Januvia declining.
To overcome the impact of Singulair open to generic competition, Merck has been striving hard to reduce costs and strengthen its pipeline.
Merck recently outlined its business strategy for 2014 at the JP Morgan Healthcare Conference.
We note that Merck undertook a restructuring plan in Oct 2013 to reduce operating costs and increase focus in core growth areas which includes prioritizing top ten markets around the world.
Merck has identified diabetes, oncology, vaccines and acute care as its core commercial therapeutic areas and plans to invest in these fields. The company aims to reduce its investments in non-core areas, which will reduce its annual operating expenses by $2.5 billion by the end of 2015. We remind investors that Merck achieved $3.5 billion of synergies from the Schering Plough merger.
Meanwhile, the company aims to recover business in its diabetes portfolio in the U.S in 2014. Merck is also focusing on progressing with its pipeline. The company recently initiated a rolling submission to the U.S. Food and Drug Administration (FDA) for a Biologics License Application (BLA) for pipeline candidate MK-3475.
Merck is developing MK-3475 for patients suffering from advanced melanoma who were previously treated with ipilimumab.
The rolling submission will allow Merck to complete portions of the application which needs to be submitted and reviewed by the FDA on an ongoing basis. Merck expects to complete the application in the first half of 2014.
Merck also plans to focus on other candidates – V503 for HPV-related cancers and suvorexant for insomnia (resubmission of data to the U.S. Food and Drug Administration in the first half of 2014). Merck also aims to complete its study on osteoporosis candidate, odanacatib in 2014.
On the other hand, returning value to shareholders through share repurchases and dividends are also a key priority for Merck. The Board of Directors authorized a $15 billion buyback program in May 2013. Merck has already repurchased $5 billion through an accelerated share repurchase program. We note that the company increased its quarterly dividend to 44 cents per share, up by a penny from 43 cents per share paid in the Oct quarter.
While we commend Merck's efforts to strengthen its portfolio and maintain profitability, we expect the top and bottom line to remain under pressure. With Singulair and a few other products facing generic competition, we look forward to further updates from the company when it reports its fourth quarter results in Feb 2013.
United Continental Scraps Airbus Offer
Leading passenger carrier,United Continental Holdings Inc. (NYSE:UAL-Free Report) has reportedly withdrawn its previous order for 12 single-aisle (SAS) planes worth $1.08 billion from European aircraft manufacturer Airbus. Adjustment of fleet as per requirement was cited as the reason for the move. Shareholders welcomed the news as the stock price moved up 4.82% on Tuesday's trade on Nasdaq.
The dropped orders include six Airbus A-319 with a list price of $85.8 million and six A-320 that have a list price of $93.9 million. At the end of the third quarter, Chicago-based United had 152 narrow-bodied A-319 and A-320. United Continental uses these fleet for domestic routes.
ArchrivalDelta Airline Inc. (NYSE:DAL-Free Report) favored Airbus after a gap of almost 21 years by announcing its plan to purchase 40 new jets from the latter in a deal worth $5.6 billion. The order includes 10 A330-300 wide-body jets and 30 narrow-body A321 to be delivered between 2015 and 2017.
The scrapping of the order does not deal a big blow to Airbus, which still has 5,559 outstanding orders. More importantly, the aircraft manufacturer is ahead of The Boeing Co. (NYSE:BA-Free Report), which has a total order book of 5,080 aircraft.
Recently, United Continental reported strong operating performance for Dec 2013. The company saw annualized PRASM growth of 11.5–12.5% owing to strong yields and better traffic throughout the month.
The airline behemoth chalked out plans to overhaul its finances as it underperformed its domestic peers in recent times. We believe this initiative will allow United Continental to meet its target of reducing annual costs by $2 billion.
Recently, the establishment of American Airlines Group Inc. (Nasdaq:AAL-Free Report) following the merger of U.S. Airways and American Airlines removed United Continental from its position as the world's largest passenger carrier. United Continental currently carries a Zacks Rank #2 (Buy).
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 MRK - FREE
Get the full Report on UAL - FREE
Get the full Report on DAL - FREE
Get the full Report on BA - FREE
Get the full Report on AAL - 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
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.
Share this article