This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at firstname.lastname@example.org or call 800-767-3771 ext. 9339.
For Immediate Release
Chicago, IL – April 24, 2012 – 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 US Airways Group Inc. ( , United Continental Holdings Inc. ( (UAL - Analyst Report), Delta Airlines Inc. ( (DAL - Analyst Report), Salix Pharmaceuticals, Ltd. ( (SLXP - Analyst Report) and Progenics Pharmaceuticals, Inc. ( (PGNX - Snapshot Report).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Monday’s Analyst Blog:
Merger Relief for American Airlines
The rumors about American Airlines, a subsidiary of AMR Corp., merging with another airline have been heating up since the company filed for bankruptcy protection in November last year. Finally, the market buzz appears to be coming true with the three labor unions of American Airlines supporting a plan for the bankrupt carrier’s merger with rival US Airways Group Inc. ( , the fifth largest U.S. airline.
This move represents a first step toward a consolidation, though creditors, directors, and management are yet to give their green signal.
The three unions – Allied Pilots Association, Association of Professional Flight Attendants and Transport Workers Union – represent as many as 55,000 employees at American Airlines. According to them, the merger would save about 6,200 jobs as opposed to what AMR Corp. can as a standalone entity, and speed up the restructuring process.
We believe the potential American Airlines-US Airways merger could change the competitive dynamics of the airline industry. The combination would be strong enough in scope and size to compete with their larger rivals, United Continental Holdings Inc. ( (UAL - Analyst Report) and Delta Airlines Inc. ( (DAL - Analyst Report). In fact, the combination would create an airline identical to the largest U.S. air carrier, UnitedContinental, in terms of revenue and traffic, and would be better than the second largest airline, Delta.
Further, the new carrier would leapfrog other airlines in the U.S. East Coast and Midwest. The potential combination would have lesser overlapping routes. The consolidation of American Airlines, if successful, would be the fourth in the last three years.
We see American Airlines-US Airways as the hottest pair in the industry as it will be in the best interest of the customers. Despite the long-standing problems with its pilot union, US Airways has been a profitable airline for the past several years, delivering best service to passengers with a top management team. On the other hand, American Airlines is a loss-making entity for several years due to its inefficient management team. In fact, it is the worst air carrier in the industry in terms of customer satisfaction.
Moreover, US Airways has been looking for a merger candidate following its bankruptcy protection filing in 2002. The company failed to acquire Delta, when it went bankrupt in 2006. As a result, US Airways will see American Airlines’ bankruptcy as a great opportunity to take over its larger rival.
We believe this is an opportune moment for American Airlines to consolidate in order to regain its lost profits and operational efficiency. As United and Delta will be long-term beneficiaries following the merger actions on both capacity and cost fronts, we believe American Airlines will also emerge as a successful candidate by balancing its debt level and lowering costs.
Nevertheless, any potential merger with AMR will take several months or a year to materialize, as American Airlines is yet to complete its court restructuring process and will undergo antitrust scrutiny.
Effective early this year, the shares of American Airlines were de-listed from the New York Stock Exchange. The company currently has a Zacks #3 (Hold) Rank for US Airways for the short term (1–3 months).
Salix Lowered to Neutral
We recently downgraded Salix Pharmaceuticals, Ltd. ( (SLXP - Analyst Report) to a Neutral recommendation with a target price of $51.00. Although Salix’ fourth quarter 2011 results exceeded expectations with higher revenues boosting performance, the company provided mixed guidance for 2012. While revenue guidance was above the Zacks Consensus Estimate of $697 million, earnings guidance was well below the Zacks Consensus Estimate of $2.63 per share. As a result, the Zacks Consensus Estimate for 2012 declined by 33 cents to $2.30 per share. The company carries a Zacks #3 Rank (short-term ‘Hold’ rating).
We expect Xifaxan (rifaximin), Salix’ lead product, to continue driving the top line. Xifaxan sales came in at $371.7 million in 2011, up 48.4%. We expect Xifaxan sales to exceed $420 million in 2012. We are pleased to see that Salix is working on developing new indications for Xifaxan 550. We are also encouraged by Salix’ plans to develop a next generation rifaximin.
Salix has also been working on expanding its product portfolio over the past few years through acquisitions and in-licensing of candidates in late stage clinical development. The company has an important regulatory event coming up later this month (April 27) with the FDA expected to respond on the company’s supplemental new drug application (sNDA) for the use of Relistor in chronic non-cancer pain patients with opioid-induced constipation.
Salix has plans to bring an oral formulation of Relistor to market. The company presented impressive phase III data from a study conducted in patients with chronic, non-cancer pain and expects to file for approval in the third quarter of 2012. Salix has an exclusive agreement with Progenics Pharmaceuticals, Inc. ( (PGNX - Snapshot Report) for the worldwide (excluding Japan) rights to Relistor.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
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 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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339