Zacks Analyst Blog Highlights: Baker-Hughes, Weatherford, AutoZone, Wyeth, Inc. and Pfizer
2009-06-25 23:13:12 -
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: Baker-Hughes (NYSE: BHI : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. ), Weatherford (NYSE: WFT : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. ), AutoZone (NYSE: AZO : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. ), Wyeth, Inc. (NYSE: WYE : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. ) and Pfizer (NYSE: PFE : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. ).
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Here are highlights from Wednesday’s Analyst Blog:
Fed: No Changes
Regarding the economic backdrop, the relative improvement was clearly stated. The Fed painted an accurate picture, describing the ongoing weakness but acknowledging that the rate of deterioration is slowing.
We are gradually moving towards what should become a period of slow growth. As such, investors may want to shift towards companies that could benefit from a rebound. These include Baker-Hughes (NYSE: BHI : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. ) and Weatherford (NYSE: WFT : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. ).
At the same time, I would maintain exposure to companies like AutoZone (NYSE: AZO : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. ) that benefit from the cautious high unemployment environment. This is important, since the recovery will not feel like a recovery to many people.
Pfizer-Wyeth Deal On Schedule
We currently rate shares of Wyeth, Inc. (NYSE: WYE : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. ) a Hold with a $49 price target. Our target assumes Pfizer’s (NYSE: PFE : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. ) shares trade up near $16.00 (currently $14.85) by the expected close date in the third or fourth quarter. At an exchange ratio of 0.985 and combined with the $33 cash per Wyeth share, this equates to roughly $49 per share.
Revenue in 2008 grew 2% and was up 1% excluding the benefit from foreign exchange. EPS was flat from 2007 on lower interest income and a higher tax rate, partially offset by lower SG&A spend. Revenue in the first quarter 2009 was lower than our forecast. This was largely due to a stronger-than-expected impact from foreign exchange, lower contribution from Alliance revenue (as a result of softer U.S. sales of Enbrel) and weaker-than-expected international sales of Effexor.
Global economic weakness also appears to be taking a toll on sales of a number of Wyeth’s pharmaceutical products as well as the consumer business. EPS of $0.95 was ahead of our ($0.89) and the Street ($0.88) estimates and significantly benefited from foreign exchange hedges and a lower-than-expected tax rate during the quarter.
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