For Immediate Release
Chicago, IL – July 30, 2012 – Zacks Equity Research highlights Texas Capital Bancshares, Inc. (TCBI) as the Bull of the Day and Ford Motor Company (F) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Medivation Inc. (MDVN), Sanofi (SNY) and Johnson and Johnson (JNJ).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Texas Capital Bancshares, Inc.'s (TCBI) second-quarter 2012 operating earnings surpassed the Zacks Consensus Estimate by a nickel. Quarterly results benefited from an increase in the top line aided by an augmentation of both net interest income as well as non-interest income, partially offset by higher expenses. Separately, the company announced a public offering of $1.75 million shares of common stock. Proceeds from this offering would be used by Texas Capital for its business and capital support.
The company's business model remains a chief growth driver. The gain in market share from its competitors and organic growth is impressive. Its efforts to hire experienced bankers and expand its presence are encouraging.
Our six-month target price of $49.00 equates to 17.0x our earnings estimate for 2012. This price target implies an expected total return of 19.9% over that period, which is consistent with our Outperform recommendation on the shares.
Ford Motor Company (F) saw a depressing 2012 second quarter, with a sharp 39% fall in profits to $0.30 per share and 6% drop in revenues to $33.3 billion due to lower operating results in all regions except North America. Further, it expects market share in the U.S. and Europe to be lower than 16.5% and 8.3%, respectively, in 2011 and overall pre-tax operating profit to be lower than 2011 compared with the prior guidance of tallying.
We are also concerned about the company's higher structural costs and economic weakness around the world. Therefore, we continue with our Underperform recommendation on the stock and set a target price of $8.25.
The current P/E, which is close to the lower end of the historical range, is at a 31% discount to the peer group for 2012. Our $8.25 target price, 6.2x 2012 EPS, reflects our Underperform recommendation.
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FDA Accepts Medivation’s NDA
Medivation Inc. (MDVN) and its partner Astellas Pharma Inc. recently reported that the New Drug Application (:NDA) for their prostate cancer candidate, enzalutamide, has been accepted by the US Food and Drug Administration (:FDA).
The companies are looking to get enzalutamide approved for the treatment of castration-resistant prostate cancer patients who have received docetaxel-based chemotherapy.
The FDA granted priority review status to enzalutamide, which means a response from the FDA should be out by November 2012. With the FDA accepting the NDA, Medivation stands to receive a milestone payment of $10 million from Astellas, as per the terms and agreements of their collaboration.
Medivation has also submitted a Marketing Authorization Application (MAA) for enzalutamide to the European Medicines Agency (:EMA) some time back.
Enzalutamide is the lead pipeline candidate at Medivation. Earlier this year, Medivation and Astellas had presented positive results on enzalutamide from the phase III AFFIRM study that was conducted in prostate cancer patients previously treated with chemotherapy. Both companies stated that besides meeting the primary and secondary endpoints, enzalutamide’s safety profile was also favorable.
Meanwhile, Medivation and Astellas have finished enrolling patients for the phase III PREVAIL study, which is being conducted in chemotherapy-naïve prostate cancer patients. Enzalutamide is also in a phase II study (:TERRAIN), which will compare enzalutamide with bicalutamide in advanced stage prostate cancer patients following medical castration with LHRH analog therapy or surgical castration.
We currently have a Neutral recommendation on Medivation, which carries a Zacks #3 Rank (short-term Hold rating). With the acceptance of the enzalutamide NDA, we expect investor focus to shift to the candidate’s FDA approval.
Upon approval, enzalutamide could very well be a game-changer for Medivation. Currently approved prostate cancer treatments include Sanofi’s (SNY) Jevtana and Johnson and Johnson’s (JNJ) Zytiga among others.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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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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