For Immediate Release
Chicago, IL – August 17, 2012 – Zacks Equity Research highlights DTE Energy Co. (DTE) as the Bull of the Day and Penn Virginia Resource Partners LP (PVR) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Takeda Pharmaceutical Company Limited (TKPYY), Amgen Inc. (AMGN) and Eli Lilly (LLY).
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 our long-term recommendation on DTE Energy Co. (DTE) to Outperform after a resounding bottom-line beat in the second quarter, which fully offset the effects of a flat top-line. The bottom-line was helped by significant demand for electricity due to record high temperatures and ongoing utility capex programs.
Our bullish outlook for DTE Energy is supported by its stable and growing utilities and non-utilities businesses. Going forward, the growth momentum will be maintained by beneficial regulatory policies in Michigan, higher authorized rates for its regulated business, growth opportunities in its un-regulated businesses and an industry-high dividend yield.
There are also plans to monetize its Barnett Shale assets and other properties, which would alleviate the need for external borrowings. Our six-month target price of $73.00 equates to about 19.0x our earnings estimate for 2012.
We have downgraded our recommendation to Underperform from Neutral on Penn Virginia Resource Partners LP (PVR), primarily due to lower commodity prices, a drop in coal production and increase in switching to emission free resources from coal. In second-quarter 2012, the partnership lagged our top and bottom-line projections.
Federal and state regulators have implemented new rules to minimize emissions of greenhouse gases. The shift of electric power generators to other sources of fuel, substituting the use of coal with natural gas or renewable energy, could affect the ability of Penn Virginia Resource's lessees to sell the coal they produce, thereby reducing its coal royalty revenues.
The partnership is trading at a premium with respect to forward P/E multiple in comparison to its peer group. Our target price of $22.00 reflects a P/E multiple of 41.5 based on 2012 EPU.
Latest Posts on the Zacks Analyst Blog:
Takeda Halts GAMMA Study in Japan
Takeda Pharmaceutical Company Limited (TKPYY) and its subsidiary Millennium, recently decided to stop its ganitumab phase III (:GAMMA) global trial in Japan. Takeda’s decision was based on Amgen Inc.’s (AMGN) decision to stop the global trial with the oncology candidate.
As per the 2008 agreement with Amgen, Takeda is responsible to commercialize and develop 12 molecules from Amgen’s portfolio which included the oncology candidate ganitumab.
We note that Amgen recently suffered a pipeline setback for its oncology candidate, ganitumab. The randomized, multicenter, double-blind, GAMMA study evaluated whether the combination of ganitumab and Eli Lilly’s (LLY) Gemzar improved overall survival in patients suffering from metastatic adenocarcinoma of the pancreas versus placebo and Gemzar, as a first-line therapy.
However, after conducting a pre-planned interim analysis of the data, an independent Data Monitoring Committee (:DMC) concluded that the combination of AMG479 and Gemzar would not be likely to improve survival in patients compared to Gemzar plus placebo. However, the DMC’s analysis of the data from the phase III study did not raise any safety concern(s).
Takeda and Millennium will discuss the future of the candidate in Japan.
Takeda is one of the largest pharmaceutical companies in Japan and one of the worldwide leaders in the industry. We believe the halting of the ganitumab study will not be a major concern for Takeda. We expect investor focus to stay on the company’s marketed products and the success of other late-stage candidates.
Takeda 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.
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