CHICAGO, March 27, 2012 /PRNewswire/ -- Zacks Equity Research highlights The Kroger Company (NYSE: KR) as the Bull of the Day and Dril-Quip, Inc. (NYSE: DRQ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Medtronic (NYSE: MDT),Boston Scientific (NYSE: BSX) and St. Jude Medical (NYSE: STJ).
We upgraded our recommendation on The Kroger Company (NYSE: KR) to Outperform following the company's fourth-quarter 2011 results. The quarterly earnings of $0.50 per share beat the Zacks Consensus Estimate by a penny, and rose 8.7% from the prior-year quarter. Total revenue climbed 7.7% during the quarter. Kroger now expects fiscal 2012 earnings between $2.28 and $2.38 per share and forecasts identical supermarket sales (sans fuel) growth of 3% to 3.5%.
We believe that a dominant position among the nation's largest grocery retailers enables Kroger to sustain top-line growth, expand store base, and boost market share. The company is also well positioned to deliver higher earnings primarily through strong super market sales (sans fuel) growth.
Kroger is also actively managing its capital and returning much of its free cash to shareholders via share buybacks and dividends. Moreover, management continues to deploy capital to concentrate more on remodels, merchandising and other viable projects.
We are downgrading our recommendation on Dril-Quip, Inc. (NYSE: DRQ) to Underperform from Neutral. The company remains exposed to the highly volatile oil and gas sector fundamentals.
We remain concerned about company-specific risks, which include new product growth challenges and potential backlog losses. Additionally, delays in deepwater infrastructure awards may also hinder the growth prospect of Dril-Quip.
The company has also exhibited restricted growth in the past few quarters and we remain cautious going forward. However, increased deepwater activity over the near term, recent capacity additions in Brazil and Singapore, as well as ongoing capacity expansions could prove beneficial over time.
Results from a major clinical study from Medtronic's (NYSE: MDT) Resolute drug-eluting stent (DES), presented at the 61st annual conference of American College of Cardiology, proved the stent to be a strong and persistent option in treating a wide variety of patients with coronary artery disease. Based on this success story, management remains highly confident about Medtronic's stent business going forward.
The company presented two-year data on DES, which achieved the US Food and Drug Administration (FDA) approval in February 2012 for the treatment of coronary artery disease in patients with diabetes mellitus. This data was derived from RESOLUTE US clinical study and 2 pooled analyses of the entire Resolute clinical program which are RESOLUTE Pooled Safety and RESOLUTE Pooled Diabetes. The data focuses on low rates of target lesion failure (TLF), target lesion revascularization (TLR) and definite/probable stent thrombosis (def/prob ST).
About 1,402 patients across 128 US-based clinical trial sites are registered for RESOLUTE US out of which 1,359 patients had low rates of TLF (7.3%), clinically-driven TLR (4.3%) and def/prob ST (0.2%). Even with 34% of these patients suffering from diabetes mellitus, results were encouraging with TLF (8.9%), clinically-driven TLR (5.7%) and no def/prob ST (0.0%).
The company expects Resolute DES to reflect a positive outcome in patients with or without diabetes mellitus. Given the large number of diabetes patients undergoing percutaneous coronary intervention annually, the Resolute DES is expected to bolster Medtronic's CardioVascular business going ahead.
Medtronic has taken several strategic initiatives to maintain its leadership position in the fiercely competitive medical devices industry as it battles to capture market share from other major player such as Boston Scientific (NYSE: BSX) and St. Jude Medical (NYSE: STJ).
Given the huge potential in the DES therapy market, Medtronic has been reallocating resources towards developing new therapies to drive growth. Along with the world's leading clinicians, researchers and scientists, Medtronic is presently focusing on providing a wide range of improved medical technology for the interventional treatment of cardiovascular diseases and cardiac arrhythmias.
Medtronic is also targeting the under-penetrated emerging economies. Moreover, its restructuring initiatives should help sustain long-term growth. We are currently Neutral on Medtronic which corresponds to a Zacks #3 Rank (Hold).
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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