Zacks Bull and Bear of the Day Highlights: OfficeMax, Navistar International, Mylan, Pfizer and Novartis

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For Immediate Release

Chicago, IL – September 27, 2012 – Zacks Equity Research highlights OfficeMax, Inc. (OMX) as the Bull of the Day and Navistar International (NAV) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Mylan Inc. (MYL), Pfizer (PFE) and Novartis (NVS).

 

 

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:

Amid a sluggish recovery in the economy, OfficeMax, Inc. (OMX) posted better-than-expected second-quarter 2012 results. The quarterly earnings of $0.12 per share beat the Zacks Consensus Estimate by $0.05 and rose substantially from $0.07 earned in the prior-year quarter, on the back of effective cost management.

OfficeMax now projects sales to remain flat or marginally higher for the third quarter, and to be flat for fiscal 2012 compared with the prior year. OfficeMax is repositioning itself to keep afloat in a difficult consumer environment. The company is containing costs, closing underperforming stores and focusing on providing innovative products and services, which should all contribute to margin improvements.

Management expects operating margin to come in line for the third quarter, and to be even with or marginally higher for fiscal 2012. The company also reinitiated its dividend payout after suspending it three and a half years ago. Consequently, we adopt a bullish stance on the stock.

 

 

Bear of the Day:

 

Navistar International (NAV) is one of the largest truck producers after Daimler and PACCAR. However, we are worried about its mounting research and development expenses on the back of stricter regulations by the government, where it generates a significant portion of revenues.

Furthermore, it faces significant supplier risk, owing to higher dependence on few suppliers of components. In the most recent quarter, the company reported a loss of $1.48 per share, a sharp contrast to the profit of $0.60 in the prior-year quarter.

The loss was also wider than the Zacks Consensus Estimate for a loss of $1.39. As such, we continue with our Underperform recommendation on the stock and set a target price of $24.00.

 

 

 

Latest Posts on the Zacks Analyst Blog:

 

 

 

Generic Pfizer Drug Launched by Mylan

 

Mylan Pharmaceuticals Inc., a subsidiary of Mylan Inc. (MYL), recently announced that it has launched its generic version of Pfizer's (PFE) Antivert (meclizine hydrochloride) 12.5 mg, 25 mg and 50 mg tablets after receiving final approval from the US Food and Drug Administration (:FDA).

Antivert is used for the management of nausea and vomiting, and dizziness associated with motion sickness. According to IMS Health, Antivert (12.5 mg, 25 mg and 50 mg tablets), generated US revenues of approximately $53.5 million for the 12 months ending June 30, 2012.

Meanwhile, Mylan has also launched the first generic version of Novartis' (NVS) Diovan HCT (valsartan and hydrochlorothiazide) tablets, 80/12.5 mg, 160/12.5 mg, 160/25 mg, 320/12.5 mg and 320/25 mg. According to IMS Health, Diovan HCT (80/12.5 mg, 160/12.5 mg, 160/25 mg, 320/12.5 mg and 320/25 mg tablets), generated US revenues of approximately $1.6 billion for the 12 months ending June 30, 2012

As of September 21, 2012, Mylan had 168 ANDAs pending FDA clearance, targeting $77.8 billion in branded sales annually. Mylan believes that about 33 of these pending ANDAs are first-to-file opportunities, representing approximately $20.8 billion in branded sales. The revenue figures are as per IMS Health for the 12 months ending June 30, 2012.

Our Recommendation

We are encouraged by Mylan’s geographic reach and product depth along with a robust generic product pipeline. However, we remain concerned about the company’s lackluster performance in the Europe, Middle East and Africa (:EMEA) region.

Additionally, with most large branded drugs due to lose patent exclusivity within the 2017-2018 period, we have little visibility on the growth prospects of generic companies like Mylan beyond that timeframe.

Thus, we prefer to remain on the sidelines and have a Neutral recommendation on Mylan. The stock carries a Zacks #3 Rank (Hold rating) in the short run.

 

 

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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Read the analyst report on OMX

Read the analyst report on NAV

Read the analyst report on MYL

Read the analyst report on PFE

Read the analyst report on NVS

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