Zacks Analyst Blog Highlights: Home Depot, Lowe's, Gilead Sciences and Pfizer.
CHICAGO--(BUSINESS WIRE)--
Zacks.com announces the list of stocks featured in the Analyst
Blog. Every day the Zacks Equity Research analysts discuss the latest
news and events impacting stocks and the financial markets. Stocks
recently featured in the blog include: Home Depot (NYSE: HD), Lowe's
(NYSE: LOW), Gilead Sciences, Inc. (Nasdaq: GILD) and Pfizer (NYSE:
PFE).
See the latest posts to the Analyst Blog by visiting:
http://at.zacks.com/?id=2673
Here are highlights from Wednesday's Analyst Blog:
Not Pounding the Table on Home Depot
Home Depot's (NYSE: HD) fourth quarter results were in line with
our expectations. The stock's valuation looks cheap relative to
historical norms, but a weak housing market still creates significant
challenges for the company.
Home Depot is waiting until Feb 28 at its annual investor and
analyst conference to discuss its outlook for 2007. We will update our
report on Home Depot after the conference. We remain neutral on HD
shares. Our target price of $43.50 reflects our view that HD shares
will track the market for the next six months.
Despite a weak housing environment, Home Depot s average ticket
increased 1.6% to $58.90 in 2006. Moreover, Home Depot is rolling out
new store initiatives that should improve its frontline operations.
These initiatives include hiring additional associates, increasing
management accounts for its contractor business, and having corporate
respond quicker to its stores.
The company is facing increasing competition from Lowe's (NYSE:
LOW), which is rapidly entering Home Depot's key urban markets.
Inconsistent customer service, problematic stock-outs, and older
stores are the major competitive hindrances. Lowe's is also spending
on technology, and Home Depot will have to continue spending heavily
on modernization, customer service, and technology upgrades to
compete. This may dampen margins.
Gilead Sciences Strength Continues
Gilead Sciences, Inc. (Nasdaq: GILD) is a biotechnology company
that develops and markets drugs for infectious diseases, including
viral, fungal and bacterial infections. The company also has
specialized focus on developing drugs for patients suffering from
HIV/AIDS. We remain optimistic about growth of HIV/AIDS franchise
drugs Truvada and the recently approved Atripla. Fourth quarter
earnings were above expectations specifically on strong sales of the
newly launched Atripla product.
In November, the company completed the acquisition of Myogen for
$2.5 billion in cash. Although dilutive in the near-term, this deal
works to fill the pipeline gap beyond 2009. We continue to be positive
on the name and have established a price target of $82.
Gilead Sciences is perhaps world s premier play on HIV/AIDS
therapy. We consider Truvada a reformulation of drugs Viread and
Emtriva to be a potential breakthrough product for the treatment of
HIV/AIDS. Additionally, the approval of Atripla offers the next big
wave of top-line growth for the company.
The acquisition of Myogen fills a significant pipeline void.
Ambrisentan should become the best-in-class ETRA (endothelin receptor
antagonist) for PAH (phenylalanine hydroxylase), and given the lack of
drug-drug interactions seen in the phase III trials, it should be used
first-line with Pfizer's (NYSE: PFE) Revatio. We have revised our
long-term earnings model to include the launch of ambrisentan in the
second half of 2007.
See the latest posts to the Analyst Blog by visiting
http://at.zacks.com/?id=2645
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