Zacks Bull and Bear of the Day Highlights: Alexza Pharmaceuticals, Novatel Wireless, Starbucks, Peet’s Tea and Coffee and Green Mountain Coffee Roasters
CHICAGO, March 17, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Alexza Pharmaceuticals (Nasdaq: ALXA) as the Bull of the Day and Novatel Wireless (Nasdaq: NVTL) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Starbucks Corp. (Nasdaq: SBUX), Peet's Tea and Coffee Inc. (Nasdaq: PEET) and Green Mountain Coffee Roasters Inc. (Nasdaq: GMCR).
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Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
We are upgrading our rating on shares of Alexza Pharmaceuticals (Nasdaq: ALXA) to Outperform and raising our price target to $3 per share. We believe the company is on track to re-file the new drug application (NDA) on AZ-004 (Staccato loxapine) for the treatment of acute agitation in patients with schizophrenia or bipolar disorder by the end of July 2011.
Based on our analysis of the complete response letter (CRL) received on October 8, 2010, and our numerous conversations with management, we believe Alexza is adequately prepared to file a full response with an excellent chance to receive approval in January 2012.
We see multiple catalysts in 2011, including the NDA filing, an FDA panel review, and a potential deal for AZ-004 commercialization, prior to the FDA's decision in early 2012 as opportunities to drive the shares toward our target.
We reaffirm our long-term Underperform recommendation on Novatel Wireless (Nasdaq: NVTL) following its fourth quarter 2010 financial results, which fell well below the Zacks Consensus Estimate. Novatel also provided a very weak first quarter 2011 financial outlook.
The company cited lower sales of its 3G products and ongoing customer transition to next-generation 4G products are the primary reasons for this poor guidance. The recent trend of the 3G USB modem industry is indicating a glut of inventory on the part of the wireless carriers. Several industry sources predicted that Verizon, an important customer of Novatel for its MiFi intelligent hotspot, may generate lukewarm demand in the first quarter of 2011, attributable to its huge modem inventory.
Novatel is now facing increasing competitive pressure from Asian equipment developers. We do not find any immediate catalyst for Novatel and expect the company to continue to lose money in 2011.
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Starbucks to Buy Peet's?
Starbucks Corp. (Nasdaq: SBUX) is reportedly in talks on buyout of the coffee roaster and retailer Peet's Tea and Coffee Inc. (Nasdaq: PEET). Though there have been no reports of any formal announcements regarding any merger or acquisitions from either companies, the analysts and industry sources claiming familiarity with Starbucks anticipate the takeover of the Emeryville, California-based Peet's specialty coffee retailer and roaster by Starbucks.
Peet's suffered a setback after Starbucks entered into a deal with Keurig brewer parent Green Mountain Coffee Roasters Inc. (Nasdaq: GMCR). As per the deal, Starbucks will distribute its coffee and Tazo tea in Keurig's K-Cup portion packs. Peet's had been a potential bidder for the deal and shares of the retailer plunged 15% after the deal was announced.
If Starbucks buys the coffee roaster, it can use Peet's relationships with major retailers, who will allow a "triad of premium brands" on store shelves, with Peet's offering super-premium, Starbucks as premium and Starbucks' secondary brand Seattle's Best Coffee positioned as "fighting" premium.
Again, Peet's Godiva-flavored coffees would also give Starbucks leverage if it enters the single-cup brewer market, which many perceive as a huge area of growth in the coffee industry. Peet's, which boasts of a loyal following of coffee drinkers called 'Peetniks,' has announced that it expects to enter the fast-growing single-cup coffee market.
Peet's and Starbucks have ties that go back to the beginning of both companies. Peet's founder Alfred Peet was widely reported to be the inspiration for Starbucks. The original founders of Starbucks bought coffee beans from Peet in their first year of business in 1971.
Peet's shares surged 9.4% to close at $46 on Tuesday amid rumors that it could be a takeover bid of Starbucks.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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