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LLY, OXM, AMAG, MIST and CPIX as Zacks Bull and Bear of the Day
By Zacks Investment ResearchStock MarketsApr 02, 2020 01:23AM ET
www.investing.com/analysis/lly-oxm-amag-mist-and-cpix-as-zacks-bull-and-bear-of-the-day-200520458
LLY, OXM, AMAG, MIST and CPIX as Zacks Bull and Bear of the Day
By Zacks Investment Research | Apr 02, 2020 01:23AM ET For Immediate Release
Chicago, IL – April 2, 2020 – Zacks Equity Research highlights Eli Lilly and Company (NYSE:LLY) LLY as the Bull of the Day and Oxford Industries, Inc. OXM as the Bear of the Day. In addition, Zacks Equity Research provides analysis on AMAG Pharmaceuticals, Inc. AMAG, Milestone Pharmaceuticals Inc. MIST and Cumberland Pharmaceuticals Inc. CPIX.
Here is a synopsis of all five stocks:
Eli Lilly and Companyis a rare big cap with rising earnings estimates. This Zacks Rank #1 (Strong Buy) is expected to see double digit earnings growth in 2020 and 2021.
Lilly is a global drug manufacturer with an interest in diabetes, oncology, immunology and neuroscience.
Another Collaboration Announced
On Mar 31, Lilly announced an exclusive global licensing and research collaboration with Sitryx, a biopharmaceutical company focused on regulating cell metabolism to develop disease-modifying therapeutics in immuno-oncology and immuno-inflammation.
The collaboration witll target potential new medicines for autoimmune diseases.
Sitryx is receiging a payment of $50 million and Lilly will make a $10 million equity investment in Sitryx.
Lilly doesn't expect the transaction to impact their 2020 non-GAPP earnings guidance.
Double Digit Earnings Growth in 2020 and 2021
The analysts are still bullish about 2020 and 2021 even with the coronavirus crisis.
According to Zacks data, no analysts have lowered earnings estimates for 2020 in the last 60 days.
Instead, the estimates have been revised higher during that time.
The 2020 Zacks Consensus Estimate has risen to $6.77 from $6.75 in the last 90 days.
That's earnings growth of 12.1% as the company made $6.04 last year.
Analysts are bullish about 2021 as well. They see another earnings gain of 17.2% with the Zacks Consensus Estimate jumping to $7.93.
Shares Are Up in 2020
While the S&P 500 has fallen 20% year-to-date on the coronavirus crisis, Lilly is up 3.8%, although, it's been a volatile ride over the last month.
Investors are seeing Lilly's shares as a place to hide out during the storm.
Investors won't get it dirt cheap. That safety factor comes at a price.
It still trades with a forward P/E of 20.5.
But that P/E reflects its business strength in this uncertain global economy.
As an added bonus, Lilly also pays a dividend, currently yielding 2.1%.
For investors looking for a big cap with solid growth, Lilly is one to keep on the short list.
Oxford Industries, Inc. is still paying its dividend despite seeing its stores shut during the coronavirus crisis. This Zacks Rank #5 (Strong Sell) had its earnings estimates slashed after not providing 2020 guidance.
Oxford Industries is a specialty retailer which operates the Tommy Bahama, Lily Pulitzer and Southern (NYSE:SO) Tide retail stores and e-commerce web sites.
A Miss on Earnings in the Fiscal Fourth Quarter 2019
On Mar 26, Oxford Industries reported its fourth quarter and full year fiscal 2019 results. It missed on the Zacks Consensus Estimate by $0.02, reporting $1.09 versus the consensus of $1.11.
Fourth quarter comparable sales, a key retail metric, rose 4%, as both Tommy Bahama and Lily Pulitzer had positive comps in the holiday quarter.
For the full year, comparable sales also rose 4% as online sales rose 10% and now make up 23% of total revenue.
Oxford also reduced the amount of wholesale business it does with the struggling department stores, which helped.
No Guidance Due to the Coronavirus Crisis
Oxford declined to provide fiscal 2020 guidance in the earnings update, which isn't a surprise as few companies are doing so at this time.
It has temporarily closed all of its North American retail stores and restaurants and has furloughed employees.
Additionally, to enhance its cash position, it drew down $200 million of its $325 million asset-based revolving credit facility.
The company also had $52.5 million in cash as of the end of the fourth quarter, which was Feb 1, 2020.
Cutting the Dividend
Oxford also announced it was cutting its dividend to $0.25 per quarter from the previous level of $0.37.
It has been paying a dividend every quarter since 1960.
This dividend, with the shares having tumbled, is still yielding 2.7%.
Earnings Estimates Slashed
Not surprising, given the state of the global economy during the crisis, the analysts moved to cut their fiscal 2020 Zacks Consensus Estimates.
3 analysts cut in the last week, pushing the Zacks Consensus down to $2.57 from $4.53.
That's a decline of 40.5% from fiscal 2019 when the company made $4.32.
Analysts do see a rebound once we're on the other side of the virus and stores are able to open again.
Fiscal 2021 earnings are expected to rise 54.3% to $3.97.
Other retailers which reported earnings in March, and didn't provide guidance, also saw their earnings estimates cut including G-III Apparel.
G-III Apparel is also a Zacks Rank #5 (Strong Sell).
Shares Plunge in Coronavirus Bear Market
Like many other small cap stocks, Oxford Industries' shares have plunged in 2020, falling 56% year-to-date.
That's worse than the S&P 500, which is down 23.5%.
But Oxford has the strong Lily Pulitzer brand that will still be strong when the pandemic ends.
Investors interested in the retailers in 2020 should stick with those with the strongest brands and balance sheets.
Additional content:
3 Drugmakers Still Worth Betting On Amid Coronavirus Woes
The coronavirus pandemic has roiled global stock markets in the past month to an extent not seen since the financial crisis of 2008-09. Demand and supply have been hit. Earnings estimates for the first quarter of 2020 have been declining for the past three months, with current expectations at 5% year over year decline.
Within the pharma industry, several large and small players have announced plans to minimize the impact of COVID-19 to key business areas. Many of these pharma/drug/biotech companies are likely to provide updated business outlooks for 2020 to include the impact of coronavirus on their first- quarter earnings call. Last week, large-pharma companies decided to delay initiation of most of their new clinical studies and stop enrollment in ongoing studies.
Earlier this week, Jazz Pharmaceuticalsannounced that it anticipates an impact to patient enrollment in certain studies and delays in the initiation of new clinical studies. The company is also actively engaged with the FDA for timely approval to its candidates, JZP-258 and lurbinectedin, which are under review in the United States. It also expects adequate supply of lurbinectedin and JZP-258 to support their U.S. launches, following a potential approval. However, the bigger pharma/biotech companies do not expect any supply chain disruptions for their marketed drugs. Several smaller drug/biotech companies too plan to delay enrollment in ongoing clinical studies.
Although the big players in the pharma/biotech industry have significant cash to withstand these delays, these will likely affect their future cash flows. However, the concerns are greater for smaller biotechs with a single or a few candidates in their pipeline. These companies lack resources to handle delays, which may result in complete shutdown of their business. With several parts of the world under a lockdown, completion of clinical studies is expected to be delayed, which will adversely impact drug approvals and their launch.
3 Biotech Stocks to Buy
Amid these uncertain conditions prevailing worldwide, here we discuss three biotech stocks, which can cushion your portfolioto a certain extent.
These three stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy) and have a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 offer the best upside potential.
Moreover, earnings estimates for these companies have risen in contrast to decline in estimates for the broader market.
AMAG Pharmaceuticals, Inc.
AMAG Pharmaceuticals carries a Zacks Rank #2. The Zacks Consensus Estimate for earnings has improved from a loss of 17 cents per share to earnings of 18 cents for 2020 in the past 30 days.
Milestone Pharmaceuticals Inc.
Milestone Pharmaceuticals carries a Zacks Rank #2. The Zacks Consensus Estimate for loss has narrowed 4.2% for 2020 in the past 30 days.
Cumberland Pharmaceuticals Inc.
Cumberland Pharmaceuticals sports a Zacks Rank #1. The Zacks Consensus Estimate for earnings has moved up 10% for 2020 in the past 30 days.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release
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AMAG Pharmaceuticals, Inc. (AMAG): Free Stock Analysis Report
Eli Lilly and Company (LLY): Free Stock Analysis Report
Cumberland Pharmaceuticals Inc. (CPIX): Free Stock Analysis Report
Oxford Industries, Inc. (OXM): Free Stock Analysis Report
Milestone Pharmaceuticals Inc. (MIST): Free Stock Analysis Report
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LLY, OXM, AMAG, MIST and CPIX as Zacks Bull and Bear of the Day
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