Science & Technology
Science and Technology
Science and Technology
Mon, June 14, 2010
Sun, June 13, 2010
Fri, June 11, 2010 Apple, Pepco Holdings, Bank of America, American Express and Merck & Co.
CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights Apple (Nasdaq: [ AAPL ]) as the Bull of the Day and Pepco Holdings Inc. (NYSE: [ POM ]) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Bank of America (NYSE: [ BAC ]), American Express (NYSE: [ AXP ]) and Merck & Co. (NYSE: [ MRK ]).
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 ]:
Apple (Nasdaq: [ AAPL ]) has experienced tremendous growth, driven by the success of its iPhones and increased Mac shipments. In our opinion, the new iPhone 4 will be another milestone achievement for the company, helping it continue on its growth path.
Moreover, we are highly positive about the company's iPad launch, which aims to revolutionize mobile computing and will provide a boost to the company's revenues and earnings in 2010. The second-quarter results beat the Zacks Consensus Expectation on the back of strong iPhone sales, increased Mac sales, new product launches, increased consumer spending and a rebound in computer shipments.
Although Apple faces tough competition in the smartphone market, we believe that its continuous effort to expand into international markets, competitive pricing strategy and new product launches will drive tremendous growth. We expect the company to report stronger results going forward, thereby providing above-market gains. Hence we upgrade the rating on the stock to Outperform.
[ Bear of the Day ]:
Pepco Holdings Inc. (NYSE: [ POM ]) engages in both regulated utility and unregulated businesses. Pepco, also referred as PHI, is one of the largest energy delivery companies in the Mid-Atlantic region, delivering a combined 50,000 gigawatt hours (GWh) of power to nearly 1.9 million customers in Delaware, the District of Columbia, Maryland and New Jersey.
Pepco has been an attractive investment based on its relatively high dividend yield of 7.0%. Going forward, however, we expect the stock to face stiffer competition from its fully regulated peers with similar dividend yields. Thus, we expect Pepco shares to Underperform its peers in the future.
We initiate coverage on Pepco with an Underperform recommendation as we expect the stock to face stiffer competition from its fully regulated peers with similar dividend yields, going forward. Our $14 target price values the stock at 11.3x 2011 EPS.
Latest Posts on the Zacks [ Analyst Blog ]:
Total Debt Rising Slowly
In the first quarter, total non-financial debt in the economy rose at a seasonally adjusted annual rate of 3.5%. That is less than half the rate that the economy was going into debt on average between 2000 and 2007.
The onset of the financial meltdown caused a sharp slowdown in the rate of debt growth in the second half of 2008, so the 6.0% growth in debt is a bit misleading, as it includes rapid debt growth in the first half of the year and a big decline late in the year.
The composition of the debt has changed significantly. Households reduced their debt at an annual rate of 2.4% in the first quarter, up from a 1.6% rate of decline in the fourth quarter and the seventh quarter in a row that households have managed to bring their debt level down.
Just to be clear, not all of that debt reduction has come from people virtuously paying down their credit cards and mortgages. Debt that is defaulted on also goes away, just like debt that is repaid. For the Flow of Funds report, there is no real difference. For Bank of America (NYSE: [ BAC ]) or American Express (NYSE: [ AXP ]) it makes all the difference in the world.
Merck Presents Positive Data
Merck & Co. (NYSE: [ MRK ]) presented positive data from a mid-stage study of one of its pipeline candidates at SLEEP 2010, the annual meeting of the Associated Professional Sleep Societies. MK-4305, a dual orexin receptor antagonist, is being evaluated in a phase IIb study in patients with primary insomnia. It was observed that the drug was more effective than placebo in improving overall sleep efficiency at night after four weeks.
The trial, conducted on 254 patients, is aimed at evaluating MK-4305 in four dosage strengths a" 10, 20, 40 and 80mg. Patients were randomized to receive either MK-4305 at one of the four dosage strengths or placebo. The primary endpoint was improvement in sleep efficiency compared to placebo on the first night and after four weeks of treatment.
The company expects to file regulatory applications for MK-4305 in 2012.
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.
About the Analyst Blog
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.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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