For Immediate Release
Chicago, IL – June 7, 2010 – Zacks Equity Research highlights AmerisourceBergen (ABC) as the Bull of the Day and American Oriental Bioengineering (AOB) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Wendy's/Arby's Group Inc. (WEN), McDonald's Corp. (MCD) and Yum! Brands, Inc. (YUM).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506.
Here is a synopsis of all five stocks:
AmerisourceBergen (ABC) continued with its strong performance in fiscal 2010 with second quarter earnings beating the Zacks Consensus Estimate by 8 cents. Earnings increased 34% from the year-ago period. Performance was driven by strong revenues, successful generic drug launches, and continued expense management.
Total revenues for the quarter increased 11.5%. The company is well positioned for growth given the strong performance of its generics and specialty pharma business. Going forward, the company should continue to benefit from growth in the pharmaceutical industry, which is driven by factors like an aging population, increased use of generics and introduction of new treatments.
Based on the strong second quarter results and improving outlook for fiscal 2010, we are upgrading the stock to Outperform with a price target of $38.
American Oriental Bioengineering's (AOB) first quarter earnings per share came in at $0.04, well below both the Zacks Consensus Estimate of $0.07 and $0.10 reported in the year-ago period. Although revenues recorded a 16.7% year-over-year increase to $53.7 million, we remain concerned about the declining operating margin.
Prescription drug sales should continue their growth trajectory as China aims to reform its health care sector to incorporate unaddressed rural markets. However, in the highly fragmented Chinese pharmaceutical industry, AOB's expenses are likely to increase given the need to stay ahead of its competitors and to meet stringent manufacturing norms.
We maintain Underperform recommendation on the stock with a price target of $3. Our target price is based on 6.5X our 2010 EPS estimate of $0.46.
Latest Posts on the Zacks Analyst Blog:
Wendy’s/Arby’s Grows Internationally
Wendy's/Arby's Group Inc. (WEN) opened its first international dual-branded Wendy's and Arby's restaurant in Dubai, UAE last month. This was an important milestone achieved by the company to fulfill its international expansion goal.
Wendy's/Arby's recently announced its growth plans in Turkey through its subsidiary Arby's Restaurant Group, Inc. The subsidiary signed a development agreement with Tab Gida Sanayi ve Ticaret A.S. to open 100 restaurants over the next ten years in Turkey, out of which 50 will open in next five years. Tab Gida owns or sub-franchises more than 430 restaurants in Turkey; this is an important step for Wendy's/Arby's to fulfill its international growth objective.
We think the limited presence of Wendy's/Arby's in the international markets provides it with ample opportunities to enhance its reach. The company believes that there is room for more than 8,000 restaurants outside of North America. The less saturated developing markets offer Wendy's/Arby's an enormous growth opportunity, in our opinion.
The company competes with McDonald's Corp. (MCD) and Yum! Brands, Inc. (YUM), and both the companies have a strong international presence.
Wendy's/Arby's reported first quarter 2010 earnings of 2 cents per share, surpassing the Zacks Consensus Estimate by a penny. The company achieved a 14.7% year-over-year growth in adjusted EBITDA in the first quarter, primarily as a result of positive same-store sales at Wendy's and a 430-basis point increase in Wendy's company-operated restaurant margin. Wendy's/Arby's also reaffirmed its fiscal year 2010 outlook.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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