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: Abbott Laboratories (NYSE: ABT), Boston Scientific (NYSE: BSX), Johnson & Johnson (NYSE: JNJ), Motorola (NYSE: MOT) and Nokia (NYSE: NOK).
See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673
Here are highlights from Wednesday’s Analyst Blog:
Products Giving Abbott Labs a Boost
Abbott Laboratories (NYSE: ABT) discovers, develops, manufactures and sells a diversified line of healthcare products. We expect a sizable pick-up in earnings growth rate over the next few years driven by strong sales of its lead product Humira, a rapidly growing vascular business, and on several new drug applications recently filed with the FDA. Based on our model, the company is expected to deliver double-digit growth from 2007 through 2010.
We believe ABT possesses a low-risk profile and will continue to trade at an industry premium. Accordingly, we continue to rate the shares a Buy and are increasing our price target to $66.
Thanks to the acquisition of Guidant's vascular business in 2006, Abbott is now a major player in the drug-eluting stent (DES) market with XIENCE V. We think XIENCE V offers differentiating characteristics such as superior in-stent late loss and efficacy in diabetic patients to Boston Scientific's (NYSE: BSX) TAXUS and Johnson & Johnson's (NYSE: JNJ) Cypher that has allowed market share gains upon the launch overseas. We forecast the XIENCE V U.S. launch in early 2008. Abbott's vascular business, which posted sales of $253 million in 2005, should grow to $3.2 billion in 2010. For 2007 we forecast $1.88 billion in total vascular sales.
Underlying MOT Problems
Motorola's (NYSE: MOT) financial release this morning direct us to some of the underlying problems. Gross margins were down precipitously as selling and market expenses continue to rise. This supports the competitive nature of the mobile handset business where Motorola faces challenges of maintaining its market share, while Nokia (NYSE: NOK) recently posted stronger results, exacerbating our concerns.
Recently, we downgraded Motorola to a Hold rating with a price target of $18. The flat guidance provided by management for their next quarter suggests that improvements may take longer than previously indicated. On a positive note, Motorola continues to repurchase shares using its strong financial cash position in excess of $8 billion. We also believe additional contention at the board level, with Carl Icahn's initiative, may foster urgency to the problems at hand.
See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645
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