The Zacks Analyst Blog Highlights: Bristol-Myers Squibb, Sanofi, AbbVie, Celgene and Telus

Zacks


For Immediate Release

Chicago, IL – May 7, 2013 – 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 Bristol-Myers Squibb Company (BMY), Sanofi (SNY), AbbVie (ABBV), Celgene Corporation (CELG) and Telus Corporation (TU).

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Here are highlights from Monday’s Analyst Blog:

Good News for Bristol-Myers

Bristol-Myers Squibb Company (BMY) recently received positive news from the US Food and Drug Administration (:FDA) when the US regulatory authority approved the pharma major’s HIV drug Sustiva for treating children between three months and three years. The body weight of the children should not exceed 3.5 kilograms.

The approval provides a once-daily option as part of a regimen for HIV infected children between three months and three years. Moreover, the “capsule sprinkle” administration procedure is beneficial for children who cannot swallow capsules or tablets.

We note that Sustiva is already approved for treating HIV infected patients aged three years and above and weighing not less than 10 kilograms. The FDA decision has expanded the patient population for Sustiva. This will boost the drug’s sales potential.

The FDA decided to expand the patient population for Sustiva on the basis of data from three open-label studies, which evaluated the pharmacokinetics, safety and antiretroviral activity of the drug combined with other antiretroviral agents in 182 antiretroviral-naïve and – experienced patients infected with HIV. The studies evaluated patients aged between three months and 21 years for a median of 123 weeks.

The FDA’s decision to broaden Sustiva’s target population is encouraging for Bristol-Myers, which has entered a challenging phase following the genericization of Plavix. Plavix, co-developed with Sanofi (SNY), went off patent in the US in May 2012. The drug’s genericization has resulted in the loss of significant revenues for Bristol-Myers.

Bristol-Myers is looking to combat the challenges confronting it through partnering deals and acquisitions and introducing new products to augment its product portfolio.

Bristol-Myers, a large cap pharma stock, carries a Zacks Rank # 3 (Hold). AbbVie (ABBV) appears to be more favorably placed in the large cap pharma space with a Zacks Rank # 2 (Buy). Meanwhile, Celgene Corporation (CELG) too carries a Zacks Rank #2.

 

 

Telus Likely to Top Earnings

 

We expect Canada-based Telus Corporation (TU), to beat expectations when it reports its first-quarter 2013 results on May 9, 2013.

Why a Likely Positive Surprise?

Our proven model shows that Telus is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +3.77%. This is a meaningful and leading indicator of a likely positive earnings surprise.

Zacks Rank #3 (Hold): Telus currently has a Zacks Rank #3. Note that the stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) and 3 (Hold) have a significantly higher chance of beating the earnings.  

The combination of Telus’s Zacks Rank #3 (Hold) and +3.77% ESP makes us confident of a positive earnings beat on May 9, 2013.

What is Driving the Better-Than-Expected Earnings?

Telus’ ongoing investment in the expansion of its fiber optic network provides compelling home entertainment services in the Western Canadian market. The company continues to add new features as well as upgrading the existing features of its popular Optik TV and Optik High Speed Internet broadband services that are gaining strong traction across the Canadian region.

The company is providing 4G LTE networks with the popular smartphones, which resulted in solid growth in its post-paid divisions.

However, Telus remains challenged by the weak Canadian economy and domestic competition, which is expected to intensify with the entry of new wireless players.  Moreover, higher burden of subsidy cost associated with smartphones coupled with lack of spectrum will continue to impede the company’s growth opportunities.

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Read the analyst report on BMY

Read the analyst report on SNY

Read the analyst report on ABBV

Read the analyst report on CELG

Read the analyst report on TU

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