Zacks Analyst Blog Highlights: GlaxoSmithKline plc, General Growth Properties, Agria Corp, Regis Corporation and Ulta Salon, Cosmetics & Fragrance, Inc.

2009-04-09 12:05:06 -

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: GlaxoSmithKline plc (NYSE: GSK), General Growth Properties (NYSE: GGP), Agria Corp (NYSE: GRO), Regis Corporation (NYSE: RGS) and Ulta Salon, Cosmetics & Fragrance,

Inc. (NASDAQ: ULTA).

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Here are highlights from Wednesday’s Analyst Blog:



Glaxo's Avandia Issue Priced-In

Sales of Avandia have been significantly negatively impacted due to safety concerns, but it appears they have recently stabilized. We believe that sales are now at, or very near, their bottom. While sales of Avandia have been cut in half from their peak level reached in 2006, it remains a very important product to GlaxoSmithKline plc (NYSE.

GSK), and stabilizing sales would be very good news.

Other than the Avandia issue, Glaxo still has to deal with generic erosion of a number of drugs, including Coreg IR, Flonase, Wellbutrin XR, Lamictal, Requip, Valtrex and Imitrex. On the positive front, we continue to be impressed by the vaccine franchise and look forward to the contribution from Rotarix, Promacta and Synflorix. And although we were disappointed by the recent delay with Cervarix, we remain confident that it will eventually be a big growth driver for the vaccine business.

Advair sales should see some incremental revenue growth from the recent launch in Japan.



General Growth Rallies Again

Shares of General Growth Properties (NYSE: GGP) were up 8% yesterday, after jumping 35% Monday, despite two down days for the sector. Volumes have spiked as well, 46 million shares were traded yesterday and 25 million today, vs. three months daily average of about 8 million shares.

GGP issued a statement after an inquiry from the NYSE which stated that the company is “unaware of any corporate developments that might explain the unusual market activity.” GGP has been in continuous negotiations with bond holders and lenders to try to extend debt maturities and modify payments. Deadlines continue to be extended as not all bondholders have agreed to the company’s proposed modifications.



Agria Sales to Fall



Agria Corp's (NYSE: GRO) financial performance through the first nine months has been hampered by significantly lower seed prices and a disruption in production of sheep-breeding products. We would not categorize the cause of either to be inherent fundamental issues that would be expected to affect sales for the long-term.

Sheep-breeding revenue should continue to rebound in the fourth quarter and into 2009. While corn seed prices will likely remain depressed until the excess inventory in the market is consumed, we do not expect this to be a protracted event.


Regis Corp. Not Cutting It

Sell-rated Regis Corporation (NYSE: RGS), the largest beauty salon company in the country, announced this morning that third quarter revenues declined 2.5% versus the prior year. Excluding the deconsolidation of its European salon operations, revenues would have been down 1.7%.

More importantly, in our opinion, is the fact that same-store-sales decreased 4.5% year-over-year.

With more than 12,800 system-wide locations throughout the world, Regis is substantially larger than peers such as Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ: ULTA). The company has interests in a wide range of salon concepts, including higher-end salons such as the Regis brand, which has an average ticket of $37, and lower-cost brands such as MasterCuts and Supercuts, which have average tickets of $17 and $14, respectively.

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