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09/04/15 04:00:58 PM
WORD ON THE STREET

Williams-Sonoma Inc., Alexion Pharmaceuticals, Inc., Medtronic plc

Williams-Sonoma Inc.(WSM) : Williams-Sonoma, Inc. (NYSE: WSM) is down nearly 15 percent since its August 19 peak of $89.38. Brian Nagel at Oppenheimer said that this pullback is due to a "subtly weaker" Q2 earning report that "unnerved already jittery investors." That loss is the patient investor's gain as the issues reflect "transitory issues." Oppenheimer's Brian Nagel reiterated the firm's view that Williams-Sonoma is one of the "best-run and most optimally positioned chains" in its industry - calling the recent pullback in shares the result of "jittery investors." The company reported earnings in late August and the stock fell as it lowered its forecast. Though net income rose and beat expectations, investors have focused on the forecast, which lowered expected EPS to $0.68 to $0.73 from $0.75. Nagel said that after "closely" reviewing recent trends, the firm concluded that the "expense and to a lesser extent sales dislocations at the chain are likely to persist." However, "they nonetheless reflect largely transitory issues." With that, Nagel said the firm left its $90 price target unchanged from its June upgrade - suggesting that there is more than 15 percent upside from current price. The firm's initial upgrade came when the price was at $79.23, above the current price at $75.99. Year-to-date, the price has increased 0.5 percent, outperforming the S&P 500 by 7.5 percent.



Alexion Pharmaceuticals, Inc.(ALXN) : In a report issued Friday, Brean Capital analyst Jonathan Aschoff looks into Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) and, after some minor model adjustments, reiterated a Buy rating and $221.00 target price on the stock. The slight tweak in the firm's financial model was triggered by the company's announcement that "the FDA has extended the Priority Review PDUFA date for Kanuma (enzyme replacement therapy to treat lysosomal acid lipase deficiency; LAL-D) by a standard three months from the previously disclosed September 8, 2015 PDUFA date." Related Link: Yale University Is Bullish On ETFs & Alexion, Sold Twitter Last Quarter According to the FDA request, Alexion recently presented additional CMC information. Therefore,"The FDA took its standard liberty of allowing itself an extra three months to review the new material." Having said this, the analysts at Brean do not expect to see any further delays in the approval of Kanuma, and they consider the current postponement as "immaterial" to both Alexion and their investment thesis. However, given the adjustments in the revenue estimates, the firm's non-GAAP EPS estimates for the third and fourth quarter of the year were trimmed to $0.96 and $0.91, respectively, from a prior estimate of $0.97 and $0.95, respectively. Alexion's management, on the other hand, reiterated its 2015 guidance. Brean is now in the midpoint of the $4.70-$4.80 per share non-GAAP earnings guidance range, and no longer at the high end of it. EU Approval Earlier this week, Alexion said that the European Commission had approved Kanuma "for the treatment of LAL-D for patients of all ages." The report explained, "Kanuma is the first treatment approved in the EU for LAL-D, a rare genetic metabolic disease in which patients of all ages could suffer multi-organ damage and premature death." The company also announced that the European Commission accepted Strensiq as well for the treatment of HPP, making it, once again, the first approved therapy for this condition.



Medtronic plc(MDT) : Medtronic PLC (NYSE: MDT) is down 13 percent over the past month. Steven Lichtman at Oppenheimer reiterated the firm's Outperform rating and $86 price target. Though there are some currency headwinds, Lichtman said that the firm is eyeing double-digit EPS growth in the next couple years. Medtronic is trading lower since posting Q1 earnings on Thursday. Traders may be holding on to management noting that Q2 EPS could be down by "a few pennies." Steven Lichtman dismissed these concerns, noting that Q1 sales and EPS "both came in ahead of consensus, led by solid US growth." Further, growth in China "saw improvement sequentially." Lichtman also dismissed currency concerns, arguing instead that the second half of FY16 will see "margin expansion" as Covidien synergies "scale-up." The company will also use improved access to cash to "build out the pipeline and continue its top-line momentum." In total, the firm expects Medtronic to post "double-digit EPS growth" over the next couple years. With an $86 price target, Lichtman sees more than 25 percent upside in the stock in the next year.



 

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