Zacks Bull and Bear of the Day Highlights: Trinity Biotech, HDFC Bank, Ltd. - ADS, Endo Pharmaceuticals, Johnson & Johnson and Abbott Laboratories

Mar 09, 2011, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, March 9, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Trinity Biotech (Nasdaq: TRIB) as the Bull of the Day and HDFC Bank, Ltd. - ADS (NYSE: HDB) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Endo Pharmaceuticals (Nasdaq: ENDP), Johnson & Johnson (NYSE: JNJ) and Abbott Laboratories (NYSE: ABT).

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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:

Bull of the Day:

Since its Q2 2010 clinical lab coag divestiture, Trinity Biotech (Nasdaq: TRIB) has slashed operating costs and begun pumping its huge and growing cash balance into higher growth segments. Expectations are high for the PDX instrument, expected to launch in Europe and the U.S. in 2011.

Development of several new POC tests is ongoing, the fruits of which should be realized in 2012. TRIB has also just announced a share buyback program and dividend.

Management has a recent history of underpromising and overdelivering. We are maintaining our Outperform rating. Our price target has moved from $9.90 to $10.80.

Bear of the Day:

We downgrade our recommendation on HDFC Bank, Ltd. - ADS (NYSE: HDB) to Underperform from Neutral based on the looming threat of higher cost of funds and ebbing loan demand.

Higher operating expenses along with puffy provisions and contingencies were the downside in its latest earnings report. Increasing competition in the retail space with the re-entry of peers is a future concern. Also, slowing loan demand is expected to keep bottom line under pressure.

Our six-month target price of $141.00 per ADS equates to about 29.8x our earnings estimate for fiscal 2011. This target price implies an expected negative total return of 9.0% over that period. This is consistent with our long-term Underperform recommendation.

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Boost for Endo Pharma

Endo Pharmaceuticals (Nasdaq: ENDP) recently received a boost when the US Food and Drug Administration (FDA) approved its oral contraceptive, Emoquette, for the prevention of pregnancy.

Emoquette is the generic version of Johnson & Johnson's (NYSE: JNJ) oral contraceptive Ortho-Cept. The approval of the oral contraceptive further strengthens Endo Pharma's portfolio.

Emoquette was added to Endo Pharma's portfolio via the acquisition of Qualitest Pharmaceuticals late last year for $1.2 billion in cash. The acquisition helps diversify Endo Pharma's business apart from bolstering its position in the generic and pain drug portfolios.

Endo Pharma Drug Launched

Recently, Endo Pharma launched Fortesta Gel for treating men (above 18 years of age) with low levels of testosterone (low T or hypogonadism) in the US. The product was approved by the US Food and Drug Administration (FDA) late last year.

Hypogonadism results from the failure of the body to produce normal amounts of the male sex hormone testosterone. The disorder is associated with erectile dysfunction and reduced sexual urge, fatigue, energy loss, depression, waning of secondary sexual characteristics in addition to osteoporosis.

The disorder affects approximately 14 million men in the US. However, only approximately 9% are being treated. The entry of Endo Pharma's newly approved product into the market will widen the treatment options for hypogonadism patients. Endo Pharma's gel (a clear, colorless, odorless gel) is prohibited from being applied to the upper body.

Fortesta Gel will compete mainly with Abbott Laboratories' (NYSE: ABT) AndroGel. The availability of the product in US markets would further boost the portfolio at Endo Pharma, which has been on an acquisition spree to expand its business.

Apart from the acquisition of Qualitest Pharmaceuticals, Endo Pharma acquired Penwest Pharmaceuticals Co. to sustain and drive growth in the area of pain management. 

Our Recommendation

Currently, we have a Neutral stance on the stock in the long-run, which is supported by the Zacks #3 Rank (short-term Hold recommendation) carried by the company.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

About the Bull and Bear of the Day

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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Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

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