Zacks Bull and Bear of the Day Highlights: Smithfield Food, BHP Billiton, Pfizer, Eli Lilly and Forest Labs
CHICAGO, Dec. 20, 2011 /PRNewswire/ -- Zacks Equity Research highlights Smithfield Food (NYSE: SFD) as the Bull of the Day and BHP Billiton Ltd. (NYSE: BHP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Pfizer Inc. (NYSE: PFE),Eli Lilly (NYSE: LLY) and Forest Labs (NYSE: FRX).
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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:
Smithfield Food (NYSE: SFD) has delivered strong second quarter 2012 earnings of $0.76 per share, surpassing the Zacks Consensus Estimate by $0.07. The result was driven by strong fresh pork earnings and robust exports despite higher raw material costs.
Further, management has undertaken restructuring initiatives in an effort to save costs and boost profitability, which augur well for future operating performance. The company's vertical integration and product mix also help increase margins.
Though rising raw material costs will continue to challenge Smithfield in future, the company is attempting to continue its fresh pork and hog production businesses and expand its packaged meats business through stronger branding and innovation.
We downgrade our recommendation on BHP Billiton Ltd. - ADR (NYSE: BHP) from Neutral to Underperform based on declining industrial demand on the back of sluggish economic growth in Europe and U.S. Other headwinds include competition from peers, upsurge in oil prices and rising inflation in the emerging markets.
Turning toward expenses, the cost of improving ore grades, mining disruptions due to natural calamities, governmental delays as well as currency fluctuations further thwart the stock. A slower global growth rate, on the back of the European crisis and a dwindling U.S. economy may impact the demand for the company's products and dampen revenue growth going forward.
Volatility in currency prices may have a significant impact on the company s financial results going ahead. Moreover, an upsurge in oil prices and rising core inflation in the emerging markets may also prove detrimental to the company's growth.
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Positive Data on Pfizer's Lyrica
Pfizer Inc. (NYSE: PFE) recently presented positive top-line data on its blockbuster drug, Lyrica (pregabalin) from a phase III study. Pfizer said that Lyrica achieved each of its three co-primary endpoints in the study that was conducted in patients with restless legs syndrome (RLS). Lyrica succeeded in showing a significant improvement compared to placebo and pramipexole.
The randomized, double-blind, 12-month trial, A0081186, was conducted with more than 700 patients. Patients participating in the study were randomized to receive either a placebo, Lyrica (300 mg/day, pramipexole (0.25 mg/day) or pramipexole (0.5 mg/day).
Initial results showed that patients in the Lyrica arm experienced a statistically significant improvement in RLS symptom severity (as measured by the International Restless Leg Group Rating Scale) after 12 weeks of treatment compared to placebo.
A statistically significant improvement in the proportion of patients responding to treatment was observed in the Lyrica arm compared to the placebo arm (as measured by the Clinical Global Impression Improvement scale) after 12 weeks of treatment.
Besides this, treatment with Lyrica resulted in a statistically significant reduction in the rate of augmentation (worsening of RLS symptoms that occur after an RLS medication is started) compared with pramipexole 0.5 mg/day over 12 months.
Common adverse events in the Lyrica arm included dizziness, somnolence, fatigue, headache and nasopharyngitis (inflammation of the nasal cavity and throat). Pfizer will conduct further analysis of the data.
Lyrica, a key drug in Pfizer's product portfolio, has experienced a very strong ramp since its introduction. Total Lyrica sales in 2010 were $3.0 billion. The product is approved in 110 countries and regions for indications like diabetic nerve pain, pain after shingles, fibromyalgia and partial onset seizures in adults with epilepsy who take one or more drugs for seizures. Other players in the fibromyalgia market include Eli Lilly's (NYSE: LLY) Cymbalta and ForestLabs' (NYSE: FRX) Savella.
While Pfizer said that it currently does not intend to seek approval for the RLS indication, we note that Lyrica is being evaluated for additional indications like chronic central neuropathic pain following traumatic spinal cord injury and peripheral neuropathic pain. Approval for additional indications would boost Lyrica sales.
We currently have a Zacks #2 Rank (short term Buy rating) on Pfizer. We are encouraged by the company's efforts to retain market share for blockbuster drug Lipitor, despite the loss of exclusivity on the product. Longer-term, we are Neutral on Pfizer.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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