Zacks Bull and Bear of the Day Highlights: Alkermes, AGL Resources, Monsanto, Syngenta and The Dow Chemical
For Immediate Release
Chicago, IL – July 11, 2012 – Zacks Equity Research highlights Alkermes, Plc (ALKS) as the Bull of the Day and AGL Resources, Inc. (GAS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Monsanto Company (MON), Syngenta AG (SYT) and The Dow Chemical Company (DOW).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
We are upgrading Alkermes, Plc (ALKS) to Outperform following the impressive results delivered by the company in the final quarter of fiscal 2012 (the second full quarter following its merger with EDT). Alkermes beat the Zacks Consensus Estimate both in terms of revenues as well as earnings. Results were boosted by the inclusion of drugs belonging to the EDT unit of Elan.
The expanded portfolio caused the company to provide bright revenue guidance for fiscal 2013. We believe that Alkermes will achieve the guidance. We are also impressed by the FDA approval and launch of diabetes drug, Bydureon, which offers significant commercial potential.
We are also pleased by the pipeline progress at Alkermes. We believe that there is significant scope for stock price appreciation from current levels.
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We are maintaining our Underperform recommendation on AGL Resources, Inc. (GAS) with a target price of $35. We expect shareholder sentiment towards the company to remain lukewarm, considering its investment in higher-risk unregulated operations, ongoing regulatory uncertainties and the challenging economic environment.
AGL's earnings are likely to suffer in 2012 due to a less-than-favorable outlook at its wholesale segment. Additionally, the inclusion of the shipping operations (post-Nicor acquisition) has left AGL with a weak business, thereby heightening its risk profile.
Considering these factors, we see little reason for investors to own the stock and therefore maintain our Underperform recommendation. Our $35 price objective reflects a 2012 P/E multiple of 13.1x.
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Monsanto Issues, Repays Debt
Monsanto Company (MON) resorted to repaying its maturing debt by floating fresh senior notes having a 10- and 30-year maturity period. The issue will be settled on July 12, 2012.
Senior unsecured notes worth $500 million have been issued precisely in two equal parts. The first lot consists of $250 million aggregate principal amount of 2.2% senior notes due on July 15, 2022. Yield to maturity on these notes is 2.213% and have been offered at 99.884% to the public. Interest will be paid semi-annually on these beginning January 15, 2013.
The second lot consists of another $250 million aggregate principal amount of 3.6% senior notes, due to mature on July 15, 2042. These notes will yield 3.608% on maturity and have been offered at 99.854%. Interest will be paid semi-annually on these beginning January 15, 2013.
The proceeds from the issuance will be used to repay $486 million of 7 3/8% senior notes maturing on August 15, 2012. Monsanto currently holds A1 (Stable) Rating issued by Moody’s, A+ (Stable) by S&P, and A+ (Stable) by Fitch credit rating agencies.
We believe the debt issuance-repayment arrangement made will work in favour of the company and help it retain its solid balance sheet position. Fiscal third quarter 2012 ending, the company had approximately $1,538 million of long-term debt, net of current portions as against a whopping $1,716 million of cash and cash equivalents balance.
Monsanto’s biotechnology research and innovations position it as a market leader above its peers, such as Syngenta AG (SYT) and The Dow Chemical Company (DOW).
The current Zacks Consensus Estimate for the fiscal fourth quarter 2012 is a loss of 44 cents, representing a year-over-year decline of 98.70%. Estimates for the fiscal years 2012 and 2013 are $3.70 and $4.30, reflecting annual growth of 25.12% and 16.06%, respectively.
Monsanto has a Zacks #1 Rank, which translates into a short-term Strong Buy rating (1-3 months).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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Read the analyst report on ALKS
Read the analyst report on GAS
Read the analyst report on MON
Read the analyst report on SYT
Read the analyst report on DOW
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