For Immediate Release
Chicago, IL – August 21, 2013 – Zacks Equity Research highlights Green Mountain Coffee Roasters, Inc. (GMCR-Free Report) as the Bull of the Day and Titan International Inc. (TWI-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the GlaxoSmithKline (GSK-Free Report), AstraZeneca (AZN-Free Report) and Sanofi (SNY-Free Report).
Here is a synopsis of all five stocks:
Green Mountain Coffee Roasters, Inc. (GMCR-Free Report) is back to being the darling of Wall Street after the NASDAQ announced it would be joining the NASDAQ-100 on Aug 22. Shares of this Zacks Rank #1 (Strong Buy) hit new 52-week highs on the news.
This comes on the heels of its fifth earnings beat in a row where the company also raised full year fiscal 2013 guidance.
Green Mountain Coffee is a specialty coffee maker which also sells the Keurig Single Cup brewing system. The K-cups are all the rage in the home coffee and specialty drink categories.
On Aug 7, Green Mountain Coffee reported its fiscal third quarter results which beat the Zacks Consensus Estimate for the fifth quarter in a row.
Revenue rose 11%, with revenue in the United States jumping 14% year over year. Canada was soft, however, which some attributed to competition from other coffee options.
Gross margin grew 720 basis points to 42.1% from 34.9% in the year before.
While the company lowered full year sales guidance to the range of 13%-14% from its prior guidance of 14%-17%, it raised full year EPS guidance to $3.19-$3.24 from its previous guidance of $3.05-$3.15.
Titan International Inc. (TWI-Free Report) continues to suffer from a build-up in tire inventory in the farm and construction industry. This Zacks Rank #5 (Strong Sell) is expected to see a double digit earnings decline in 2013 on tough market conditions.
Titan International supplies wheels, tires and assemblies for off-highway equipment used in agriculture and earthmoving/construction.
When agriculture and mining was booming, tire sales were too. In 2011, the farmers took home record income and Titan's earnings jumped 253%.
But excess inventory that has been dropped into the aftermarket from the farm, construction and mining industries has impacted pricing.
On July 24, Titan reported second quarter results and missed on the Zacks Consensus by 49%. Earnings were 24 cents compared to the Zacks Consensus Estimate of 47 cents.
It was Titan's third big miss in the a row even though it had warned on the year in June.
Sales rose 29.2% to $593.3 million but the North American construction market saw volumes decrease 25% due to soft construction trends.
Glaxo Flu Vaccine Gets U.S. Approval
GlaxoSmithKline (GSK-Free Report) recently announced that the U.S. Food and Drug Administration (:FDA) has cleared its quadrivalent formulation of intramuscular Flulaval. Flulaval Quadrivalent has been approved for the prevention of influenza caused by types A and B strains in adults and children aged 3 years and above.
Flulaval Quadrivalent helps fight against two strains of influenza A and two strains of influenza B, thus providing it with an edge over the currently available trivalent Flulaval version, which is only approved for use in adults. We expect the approval of Flulaval Quadrivalent to enable the company to solidify its position in the market once it is made available next year.
We note that this is the second intramuscular quadrivalent influenza vaccine in Galxo’s portfolio. In Dec 2012, the FDA approved Fluarix Quadrivalent for treating adults and children aged 3 years and above. The intramuscular vaccine is now available to the customers.
Currently approved quadrivalent influenza vaccines include AstraZeneca’s (AZN-Free Report) intranasal influenza vaccine FluMist Quadrivalent and Sanofi’s (SNY-Free Report) quadrivalent formulation of Fluzone.
Glaxo currently holds a Zacks Rank #3 (Hold). The biggest near-term challenge for Glaxo will be to replace the revenues that will be lost to generic competition. Products like Valtrex, Lamictal, Imitrex, Requip, Combivir and Epivir are already facing declining sales due to intense generic competition.
Going forward, a major part of Glaxo’s revenues will be exposed to generic competition, as products like Pandemrix and Prepandrix are scheduled to lose exclusivity in the next few quarters.
We believe that the pipeline at Glaxo must deliver to counter the generic threat. We are impressed by Glaxo’s growth-by-acquisition strategy to combat the loss of revenues due to genericization of key products.
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