For Immediate Release
Chicago, IL – February 8, 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 Comstock Resources Inc. (CRK), Pfizer Inc. (PFE), Actavis, Inc. (ACT), Sanofi (SNY) and Novo Nordisk (NVO).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Thursday’s Analyst Blog:
Comstock 4Q: Yet Another Miss?
Domestic energy explorer Comstock Resources Inc. (CRK) is set to release its fourth-quarter 2012 results after the closing bell on Monday, Feb 11.
In the preceding quarter, Comstock delivered a negative 92.31% earnings surprise – the third earnings miss in a row – hamstrung by depressed natural gas prices. Let’s see how things are shaping up prior to this announcement.
Factors to Consider This Quarter
Comstock’s highly gas-weighted reserves/production profile, along with its geographically concentrated asset base, is the key area of concern. Additionally, the rise in net debt/reduction of liquidity associated with the recent Delaware Basin acquisition is a drag on the balance sheet.
Taking a cautious view of gas prices, the company’s capital program specifically focuses on the promising North American liquids-rich areas, which is a major shift away from dry natural gas development. However, with natural gas prices likely to remain weak over the next one year or so, thereby pressuring profitability, Comstock’s ability to generate positive earnings surprise will be limited.
In fact, the Zacks Consensus Estimate for the fourth quarter has moved down by 6 cents to a loss of 30 cents per unit over the last 30 days as the tendency for a downward estimate revision was more obvious.
Our proven model does not conclusively show that Comstock Resources is likely to beat the Zacks Consensus Estimate in the fourth quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1 (Strong Buy) or at least Zacks Rank #2 (Buy) or Zacks Rank #3 (Hold) for this to happen. Unfortunately this is not the case here as elaborated below.
Negative Zacks ESP: This is because the Most Accurate estimate stands at a loss of 34 cents, while the Zacks Consensus is narrower at a loss of 30 cents. This results in a difference of -13.33%.
Zacks Rank #3 (Hold): Comstock Resources’ Zacks Rank #3 (Hold), however, increases the predictive power of ESP. That said, we also need to have a positive ESP to be confident of an earnings surprise call.
Favorable Ruling for Pfizer
Pfizer Inc. (PFE) recently received a favorable ruling in its patent infringement case against Actavis, Inc. (ACT) for Rapamune. The US District Court for the District of Delaware declared that Pfizer’s patent for sirolimus, the active ingredient in Rapamune, is valid and infringed.
Actavis, formerly known as Watson Pharma, was looking to launch its generic version of Rapamune which is indicated for the prevention of organ transplant rejection in kidney transplant patients aged 13 years and older.
Pfizer had initiated the patent infringement lawsuit in Apr 2010. With the Court ruling in Pfizer’s favor, Actavis will not be able to launch its generic version of Rapamune before the patent expires unless the company appeals the ruling and wins. The challenged patent is slated to expire on Jan 7, 2014.
Actavis is currently reviewing the Court’s ruling and intends to consider all options including the possibility of appealing the decision.
Pfizer currently carries a Zacks Rank #3 (Hold). The company recently announced fourth quarter earnings which were above expectations but below the year-ago earnings. Results were hit by the loss of exclusivity of certain products and the unfavorable impact of currency fluctuation.
Pfizer’s 2013 guidance was in line with expectations. While near-term earnings will be driven by cost cutting efforts and share repurchases, longer-term growth will depend on the success of drug development. The company’s pipeline needs to deliver given the Lipitor loss of exclusivity and the upcoming loss of exclusivity on additional products in the next few years.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339
More From Zacks.com