For Immediate Release
Chicago, IL – August 3, 2012 – 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 ConAgra Foods Inc (CAG), Unilever Plc (UL), H.J. Heinz Co. (HNZ), Kraft Foods Inc. (MDLZ) and Novartis AG (NVS).
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Here are highlights from Thursday’s Analyst Blog:
ConAgra Buys Unilever’s “Frozen” Biz
ConAgra Foods Inc (CAG) has recently announced a deal with Unilever Plc (UL) to take over its North American frozen meal business. ConAgra had to shell out $265 million for the takeover and added the premium Bertolli and P.F. Chang's brands to its frozen foods portfolio.
The recent acquisition marks the fifth acquisition for the company within a year and is on the heels of the purchase of National Pretzel Company, Del Monte Canada, Odom's Tennessee Pride and Kangaroo Brands. The deal is expected to close in third quarter 2012.
This divestiture is consistent with Unilever’s strategy of exiting from its global frozen foods business. Aimed at this, Unilever has agreed to sell the licensing rights of its Bertolli and P.F. Chang's brands to ConAgra Foods.
Worth mentioning is the fact that these frozen meal brands generated about $300 million in sales in 2011 for Unilever. ConAgra believes this acquisition to strengthen its business expansion targets and further boost product portfolio.
However, Unilever will retain the Bertolli trademark and intend to continue its existing pasta sauce business at Kentucky manufacturing site. Also, the Owensboro production facility of Unilever will not be transferred to ConAgra due to the above sell-off.
ConAgra Foods Inc. reported fourth-quarter 2012 loss per share from continuing operations of 21 cents (as reported), down from earnings per share of 61 cents reported a year ago. The food maker believes that the above deal will not affect the company’s fiscal 2013 goal of 6% to 8% earnings growth from $1.84 per share earned in fiscal 2012.
Omaha, Nebraska-based ConAgra Foods Inc. is one of North America’s leading food companies, serving grocery retailers, restaurants and other foodservice establishments, with brands in 97% of America’s households. The company primarily competes with H.J. Heinz Co. (HNZ) and Kraft Foods Inc. (MDLZ). On the other hand, Unilever, based in the Netherlands, is a massive consumer products company with products ranging from Degree deodorant to Ragu pasta sauce.
We have a Neutral recommendation on ConAgra over the long term. Also, ConAgra has a Zacks #2 Rank, implying a short-term (1-3 months) Buy rating.
Novartis’ Afinitor Gets EU Nod
Novartis AG’s (NVS) cancer drug, Afinitor, recently received approval from the European Commission for the treatment of HR+ HER2- advanced breast cancer in combination with exemestane, in postmenopausal women whose cancer has progressed on an aromatase inhibitor.
The approval did not come as a surprise, as earlier Afinitor had received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (:EMA).
Phase III data on Afinitor has shown that median progression-free survival (PFS) was more than doubled in patients treated with Afinitor plus exemestane compared to patients on exemestane alone. Treatment with Afinitor improved the median PFS to 7.8 months from 3.2 months with exemestane alone.
EU approval came shortly after Novartis gained approval from the US Food and Drug Administration (:FDA) for Afinitor in advanced breast cancer with exemestane, after the failure of treatment with Femara (letrozole) or Arimidex (anastrozole).
Novartis is currently studying Afinitor in two phase III trials for the treatment of HER2-positive breast cancer.
We view Afinitor’s approval for the advanced breast cancer as a major positive for Novartis. The label expansion should boost Afinitor revenues significantly. Afinitor, which is already approved for advanced renal cell carcinoma following progression on or after vascular endothelial growth factor (:VEGF)-targeted therapy, and locally advanced, metastatic or unresectable progressive neuroendocrine tumors of pancreatic origin posted sales of $443 million in 2011.
Currently, we have a Neutral recommendation on Novartis. The company carries a Zacks #3 Rank (Hold rating) in the short run.
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