Zacks Bull and Bear of the Day Highlights: Grupo Aeroportuario del Centro Norte, Titan Machinery, Eli Lilly, Novo Nordisk and Bristol-Myers Squibb
Zacks Equity Research
For Immediate Release
Chicago, IL – April 19, 2013 – Zacks Equity Research highlights Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB) as the Bull of the Day and Titan Machinery Inc. (TITN) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Eli Lilly and Company (LLY), Novo Nordisk (NVO) and Bristol-Myers Squibb (BMY).
As the Mexican economy heats up, so will its transportation needs. Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., otherwise known as OMA (OMAB), is on the front lines of the expansion as it operates 13 airports in Mexico. This Zacks Rank #1 (Strong Buy) is expected to see double digit earnings growth in both 2013 and 2014.
Most people only think of the airlines, truckers and railroads when they think of transportation infrastructure. But Mexico also has three companies that run the airports themselves.
OMA operates airports in the north and central regions of Mexico including the important business center of Monterrey, which is Mexico's third largest metro area. It also services key tourist destinations of Acapulco, Mazatlan and Zihuatanejo.
Additionally, it operates a hotel and commercial center outside of Terminal 2 at the Mexico City airport.
With the Mexican economy growing around 4% in 2012, it's not surprising that airport traffic was up for the year. OMA saw total revenue grow 14.7% in 2012. Passenger growth jumped 7%.
The record setting days for the big machinery sellers are over. Recently, Titan Machinery Inc. (TITN) missed the Zacks Consensus Estimate for its fiscal fourth quarter by 20%.
The agriculture and construction equipment industry is facing a tough 2013. Farmers are still recovering from last year's drought and the construction segment, while improving, is only slowly coming off the mat. Fiscal 2014 estimates have been cut. Titan has fallen to a Zacks Rank #5 (Strong Sell).
Titan Machinery doesn't make the equipment, it simply sells it at 106 dealerships in the United States and 14 in Europe. It sells the CNH Brands, which is owned by Fiat, including CaseIH, New Holland Agriculture, Case Construction, New Holland Construction Kobelco and CNH Capital.
On Apr 10, Titan reported its fiscal fourth quarter results and missed the Zacks Consensus by 18 cents. It was the third miss in the last four quarters.
Eli Lilly and Company (LLY) recently announced top-line data on its type II diabetes candidate, dulaglutide. The company said that dulaglutide met its primary endpoint in two phase III studies (AWARD-2 and AWARD-4) which are a part of the AWARD program.
Dulaglutide is a glucagon-like peptide 1 (GLP-1) analog which is being developed for the once-weekly treatment of type II diabetes.
Eli Lilly said that with dulaglutide (1.5 mg) meeting the primary efficacy endpoint of non-inferiority to insulin glargine, superiority for lowering HbA1c levels was also evaluated. Dulaglutide 1.5 mg achieved a statistically superior reduction in HbA1c level compared to insulin glargine at 52 weeks in type II diabetes patients on metformin and glimeperide (AWARD-2). Moreover, results from AWARD-4 showed that dulaglutide 1.5 mg plus insulin lispro demonstrated a statistically superior reduction in HbA1c levels compared to insulin glargine plus insulin lispro at 26 weeks.
Gastrointestinal events were the most frequently reported adverse events. This has been observed in other GLP-1 agonists as well.
We note that positive top-line results from the other three AWARD studies were presented in Oct 2012. Results from the AWARD program will be used to support dulaglutide regulatory filings, which are scheduled for this year.
While we are encouraged with the phase III data, we note that the GLP-1 market is getting pretty crowded. While approved products include Novo Nordisk’s (NVO) Victoza and Bristol-Myers Squibb’s (BMY) Bydureon and Byetta, other big pharma companies also have GLP-1 candidates in late-stage development.
Eli Lilly currently holds a Zacks Rank #3 (Hold). The biggest near-term challenge for Eli Lilly will be to replace the revenues that will be lost to generic competition now that Zyprexa has lost US and EU exclusivity. The generic threat will continue to pose challenges for Eli Lilly with Cymbalta slated to lose patent protection in late 2013 and Evista in 2014. On the flip side, the Animal Health business and the diabetes franchise should provide some downside support. We are also pleased to see Eli Lilly pursuing small acquisitions and in-licensing deals to boost its pipeline.
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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