For Immediate Release
Chicago, IL – September 28, 2015– Zacks Equity Research highlights Delta Air Lines (DAL) as the Bull of the Day and Tribune Publishing ( TPUB) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Aduro BioTech, Inc. (ADRO), Incyte Corporation (INCY) and Novartis AG ( NVS).
Here is a synopsis of all five stocks:
Bull of the Day:
If 2014 was the year that airline stocks took off, then 2015 has been one in which many companies in the sector have reached cruising altitude. Take Delta Air Lines (DAL) for example. The company saw shares rise by about 75% in 2014 but so far in 2015, shares have been in the red and are basically in-line with the S&P 500.
Given this lackluster performance so far this year, many investors might think that some airline stocks have seen their best days and that more outperformance isn't in the cards. However, DAL in particular has seen some very promising activity as of late and this could be a stock that is poised for a Q4 surge in many investor portfolios.
Investors have seen very positive activity on the earnings estimate revision front as of late as many analysts have been ratcheting up their expectations for DAL. We actually haven't seen any new estimates go lower in the past sixty days for the current year, next year, or current quarter time frames. instead, we have seen eight estimates go higher for the current year in the past two months and six higher for the next year time frame.
The magnitude of these shifts in expectations has also been impressive but especially for the next year time frame suggesting that the DAL story has plenty of legs. Consider that two months ago we saw EPS estimates of $5.26/share for DAL's next year earnings and today we are seeing a consensus estimate of $5.49/share instead. This is now 20% growth for the next year time frame which is already on top of 39% growth projected for this year!
DAL is also riding a nice streak of earnings beats as the company has beaten in each of the last four quarters meaning they know how to meet and manage lofty expectations. No wonder DAL has been able to secure a Zacks Rank #1 (Strong Buy) putting it into very rare company.
Bear of the Day :
One of the big stories of 2015 has definitely been the ongoing slump in Big Media stocks like the Tribune Publishing ( TPUB) company. Stocks like TPUB have severely struggled over the last few months and changing trends and consumers make a turnaround appear unlikely.
Consumers are increasingly turning to smaller niche sites for their news while a variety of major digital media companies have sprung up in the past few years as well. All of this makes it more difficult for TPUB to sell subscriptions-- or get more eyeballs -- for its lineup of newspapers and affiliated sites such as the Chicago Tribune, the LA Times or the Baltimore Sun just to name a few.
Shares of TPUB are actually down more than 50% in the past 12 months as investors abandon this company for higher growth opportunities in the media world. And while this is obviously a significant decline, there is little hope that a quick turnaround is at hand anytime soon, and especially if you look to recent earnings estimate revisions from analysts who cover the stock.
The Zacks Consensus Estimate for TPUB has cratered in recent weeks as the current quarter has fallen from a profit of three cents per share down to a loss of seven cents a share in just the past two months. The full year estimate isn't any better as this has fallen from $1.57/share two months ago to just $1.17/share today.
Clearly TPUB hasn't bottomed out from an EPS perspective as earnings are now projected to decline by nearly 30% year-over-year. This is a pretty big fall from just a few months back when the estimate called for just a 6% decline in growth.
Thanks to these figures it shouldn't be too surprising to note that TPUB has a Zacks Rank #5 (Strong Sell) and that we are expecting more underperformance from the company in the near term.
Aduro to Acquire Bionovion in Cash & Stock Deal
Aduro BioTech, Inc. ( ADRO ) announced that it has entered into a definitive agreement to acquire the Netherlands based BioNovion Holding B.V.
As per terms of the agreement, BioNovion is entitled to receive €14.5 million in cash and €14.5 million in Aduro stock. In addition, the company’s shareholders will receive payments upon the achievement of specific regulatory milestones.
The transaction is slated to close in Oct 2015.
We note that the acquisition of BioNovion will expand Aduro’s preclinical pipeline to include immune checkpoint inhibitors and other monoclonal antibody candidates with unique specificity.
We remind investors that Aduro has been pursuing deals to boost its pipeline. Earlier this month, the company inked a clinical trial agreement with Incyte Corporation (INCY) under which Aduro’s CRS-207 will be evaluated in combination with Incyte's oral IDO1 inhibitor, epacadostat (INCB24360), in patients with ovarian cancer.
In Mar 2015, the company inked a collaboration agreement with Novartis AG ( NVS) for the worldwide research, development and commercialization of immuno-oncology products derived from its cyclic dinucleotide (CDN) approach to target the STING (stimulator of interferon genes) receptor.
Meanwhile, the company continues to progress on its pipeline. Currently, the company is evaluating CRS-207 for a number of cancer indications such as mesothelioma and pancreatic, non-small cell lung, ovarian and gastric cancers. Aduro plans to initiate a phase I/II study on CRS-207 in patients with platinum-resistant ovarian, fallopian or peritoneal cancers in early 2016.
CRS-207 has orphan drug status in the U.S. for the treatment of mesothelioma and in combination with GVAX Pancreas for the treatment of pancreatic cancer. The FDA also granted Breakthrough Therapy designation to CRS-207 in combination with GVAX Pancreas for the treatment of metastatic pancreatic cancer.
This combination is in a phase II study for the treatment of metastatic pancreatic cancer, with results expected in the first half of 2016.
Aduro carries a Zacks Rank #4 (Sell).
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About the Bull and Bear of the Day
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DELTA AIR LINES (DAL): Free Stock Analysis Report
TRIBUNE PUBLSHG (TPUB): Free Stock Analysis Report
ADURO BIOTECH (ADRO): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
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