DAILY GROWTH STOCK UPDATE/ Comments: Alza Corp. (NYSE: AZA) $38.69 Buy Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals "After yesterday's close, Alza reported 4Q00 EPS of $0.25 (normalized, ex-charges) vs. $0.13, an 88% increase, a penny ahead of our estimates and consensus," said Hazlett. "Our 2001 and 2002 EPS estimates remain unchanged at $1.02 and $1.25, respectively. With exceptional growth prospects that we see for Concerta in the near term and its strong technology platform over the long term, we expect significant and sustainable strong sales and above 20% EPS growth for Alza. A near-term catalyst for AZA shares may be the company's upcoming analyst meeting on February 27. We reiterate our Buy rating on AZA shares." Biomet, Inc. (Nasdaq: BMET) $33.25 Buy Wade King, Medical Technologies "We believe that the shares of Biomet offer an excellent opportunity this year for investors seeking superior returns with controlled risk," said King. "We believe the company's fundamentals remain solid, with good, consistent growth prospects going forward. Based on a 30x multiple on our estimated C2002 EPS of $1.48, our year-end price target is $45. We believe this offers investors in Biomet at current levels the opportunity for over 35% ROI in a mid-cap, premier medical technology company. Our rating on Biomet is Buy." Cash America International, Inc. (NYSE: PWN) $6.00 Long-Term Attractive Jordan Hymowitz, eCredit & Lending/I-Auto Justin Hughes, Financial Services "Cash America reported 4Q00 EPS from lending operations of $0.21, $0.01 better than our estimate," said Hymowitz and Hughes. "Including losses at subsidiaries, PWN reported 4Q00 EPS of $0.13, $0.01 below our estimate. We believe Cash America is one of a few companies that would benefit in a recession. Higher unemployment rates and lower disposable income could revitalize demand for pawn loans and the company, through its low loan balances and merchandise, is well positioned should demand recover, in our view. We continue to rate PWN shares Long-Term Attractive." CSG Systems International, Inc (Nasdaq: CSGS) $45.75 Long-Term Attractive Marianne Wolk, Wireless Data/eCommunications "CSG reports revenues and EPS slightly ahead of our forecasts, but a $13mm boon in software revenues ($50mm for the full year) resulting from its arbitration agreement with AT&T (October 11th) contributed $0.08-$0.14 to EPS this quarter, offsetting weak processing fees," said Wolk. "Putting its balance sheet to work, the company extended payment terms to long-standing customers like AT&T Broadband. We remain cautiously optimistic as CSG pursues greater growth through diversification. CSG continues to invest heavily in its international business targeting cable and DBS customers in Europe, Latin America, and the Asia Pacific region. After responding to at least 8 RFPs last quarter (making 5 short lists), CSG should report some international wins Q1." Eli Lilly and Company (Nasdaq: LLY) $82.38 Buy Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals "Lilly reported 4Q00 EPS of $0.70 vs. $0.61, a 15% increase, in line with consensus but a penny below our estimates," said Hazlett. "Our 2001 and 2002 EPS estimates remain unchanged at $2.88 and $3.20, respectively. LLY shares will likely continue to be driven by the emergence of its pipeline that currently has 10 compounds in late-stage clinicals or currently awaiting registration, in our view. Zovant's (sepsis) Prowess trial data will be presented on February 11, and the compound should be filed and approved in 3Q01. We believe other significant events upcoming in 2001 include filings for tomoxetine for attention deficit/hyperactivity disorder (ADHD), Cialis for erectile dysfunction and possibly duloxetine for depression. We continue to rate LLY shares Buy." Regeneron Pharmaceuticals, Inc. (Nasdaq: REGN) $36.69 Buy Michael King, Biopharmaceuticals "Last night, REGN reported 4Q:00 results," said King. "EPS was ($0.23) versus our ($0.29) estimate. For FY2000, EPS was ($0.61) versus our ($0.66). After adjustments for SAB-101, loss for the year will be restated as ($0.65). REGN plans to start a Phase III trial for Axokine in the treatment of obesity and bring three additional compounds into the clinic in 2001 (VEGF trap, IL- 4/IL-13 trap, and pegylated Axokine). We believe the trap program will gain more visibility in the coming year and investors will recognize the potential of this approach to treating disease. REGN remains one of our favorite stocks for 2001 and we reiterate our Buy rating." Schering-Plough Corporation (NYSE: SGP) $53.63 Market Performer Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals "Yesterday Schering-Plough reported 4Q00 EPS of $0.39 vs $0.34, a 15% increase, in line with both our expectations and consensus," said Hazlett. "We are maintaining our full-year 2001 estimates of $1.91 for the company. We continue to rate shares of SGP Market Performer. With slower prescription growth for its two key franchises (allergy and hepatitis C) and competition on the horizon for its pipeline products (DCL and PEG Intron A) that will replace those existing franchises, we believe additional market share gains will likely be achieved through substantial marketing expense for the company, especially if desloratadine is approved without a meaningful marketing advantage in its label." Sepracor Inc. (Nasdaq: SEPR) $73.44 Buy Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals "Last night, Schering-Plough announced that on January 19, 2001, it received an approvable letter from FDA for desloratadine (DCL) for allergies," said Hazlett. "DCL is the heir-apparent to Schering's blockbuster allergy therapy Claritin. Sepracor will receive low-single-digit royalties on revenues for DCL, increasing to mid-single digits upon reaching certain milestones. This announcement has been long awaited, as desloratadine's original tentative PDUFA date was thought to be Oct. 26, 2000. We believe this announcement serves as a validation of Sepracor's drug discovery technology, and will likely assuage investor concern that has been in existence since the development of one of its out-licensed products was halted (r-fluoxetine). We believe this is one of several significant near-term significant positive events for Sepracor, including an announcement of final DCL approval in the US, and a potential February filing for norastemizole, Sepracor's own allergy drug. We reiterate our Buy rating on SEPR shares." SpeechWorks International Inc. (Nasdaq: SPWX) $41.94 Buy Marianne Wolk, Wireless Data/eCommunications "SpeechWorks reported 4Q results of $10.6MM and ($0.17), both above our $9.6MM and ($0.20) estimates," said Wolk. "License sales of $6.1MM well exceeded our $5MM estimate, resulting in better than expected gross margins of 71% (vs. our 68% estimate). The cash balance remained healthy at $113.6MM, while DSOs increased 10 days to 75, but stayed below the expected range of 80- 85 days. We believe SpeechWorks' rocketing valuation and the pending increase of its float could leave it vulnerable near-term. We size the supply coming to market at perhaps 1-3MM of the 18MM shares to be released, assuming the stock due next week is mainly held by officers (approx. 5MM shares) that are subject to Rule 144 volume restrictions and VCs (approx. 11MM). In light of SpeechWorks' strong Q4 results, solid momentum and visibility, we continue to support the long-term fundamentals of the company and the voice industry. In our view, SpeechWorks is a solid long-term investment for those wishing to own a pure player in the rapidly evolving voice industry and any weakness related to the increase in its float should represent a good entry point for investors." Station Casinos, Inc. (NYSE: STN) $13.25 Long-Term Attractive Harry Curtis, Gaming & Lodging Smedes Rose, Gaming & Lodging "We are maintaining our 2001 EPS estimate of $0.88 for Station Casinos, but we are adjusting our quarterly estimates for the year," said Curtis and Rose. "We expect EPS will be lower in the first half of the year, accelerating into the second half. In 1Q:01 our estimate declines to $0.20 from $0.28, and in 2Q our estimate declines to $0.22 from $0.24. For the second half of the year our estimates increase, and 3Q:01 goes to $0.22 from $0.17, with 4Q increasing to $0.24 from $0.22." Industry Updates: Q4:00 Real Estate Equities Earnings Preview & Investment Outlook Jay Leupp, REITs/REOCs/Real Estate Services Paul Penney, REITs/REOCs/Real Estate Services "For the Q4:00 earnings season, we expect most REITs and REOCs to post modestly positive results, with annual (Q4:00 over Q4:99) FFO/share growth of 8.9%, driven by average same store NOI growth of 4.5%, external growth of 1.5-2.0%, and the effect of financial leverage adding 2.0%-3.0%," said Leupp and Penney. "We are expecting above-average same store NOI growth in the apartments, office and lodging sectors, average same store NOI growth in the self-storage sector, and below-average NOI growth in the manufactured home community, industrial and retail sectors." The Web Report - Volume 4, Issue #4 Robertson Stephens Internet analysts highlight certain industry trends and company news. http://www.internetstocks.com Unless otherwise noted, prices are as of Thursday, January 25, 2001. Robertson Stephens maintains a market in the shares of Broadcom, PMC- Sierra, Ceragon, Corvis, E.piphany, Excite@Home, Gilead Sciences, Homestore.com, Kulicke & Soffa, LookSmart, Micrel, Multex.com, Network Engines, Packeteer, Biomet, CSG Systems, Regeneron, Sepracor, and SpeechWorks and has been managing or comanaging underwriter for or has privately placed securities of Ceragon, Corvis, E.piphany, Homestore.com, Kulicke & Soffa, LookSmart, Multex.com, Network Engines, Packeteer, and Regeneron within the past three years. Robertson Stephens, Inc. and its international affiliates ("Robertson Stephens") is the leading full-service investment bank focused exclusively on growth companies. The firm provides a comprehensive set of investment banking products and services, including equity underwriting, sales & trading, research, M&A advisory, convertible securities, private capital, equity derivatives, and corporate and executive services. 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(Member NYSE), an affiliate of Robertson Stephens, Inc., is the specialist that makes a market in Alcatel, AutoNation, Inc., Cabletron Systems, Inc., Cash America International, Inc., Catellus Development Corp., CKE Restaurants, Inc., Computer Associates International, Electronic Data Systems Corporation, Ethan Allen Interiors Inc., FelCor Lodging Trust Inc., Foundation Health Systems, Inc., Harrah's Entertainment, Inc., Hilton Hotels Corporation, The Home Depot, Inc., International Game Technology, Jones Apparel Group, Inc., McDonald's Corporation, The Men's Wearhouse, MGM Mirage, Inc., National Semiconductor Corporation, Park Place Entertainment Corporation, Public Storage Inc., Scientific-Atlanta Inc., Seagate Technology, Inc., Shurgard Storage Centers, Inc., Station Casinos Inc., The Talbots, Inc., Tommy Hilfiger Corporation and Wal-Mart Stores, Inc. and at any given time, Fleet Meehan Specialist may have an inventory position, either "long" or "short," in this security. As a result of Fleet Meehan Specialist's function as a market maker, such specialist may be on the opposite side of orders executed on the floor of the Exchange in this security. Copyright (C) 2001 Robertson Stephens Robertson Stephens is a member of the National Association of Securities Dealers, CRD number 41271. SOURCE Robertson Stephens (FBF) CO: Robertson Stephens; Broadcom Corporation; PMC-Sierra, Inc.; Ceragon Networks; Corvis Corporation; E.piphany, Inc.; Excite@Home; Gilead Sciences Inc.; HomeStore.com; Kulicke and Soffa Industries, Inc.; LookSmart, Ltd.; Micrel, Incorporated; Multex.com Inc.; Network Engines, Inc.; Packeteer, Inc.; STMicroelectronics N.V.; Alza Corp.; Biomet, Inc.; Cash America International, Inc.; CSG Systems International, Inc.; Eli Lilly and Company; Regeneron Pharmaceuticals, Inc.; Schering-Plough Corporation; Sepracor Inc.; SpeechWorks International Inc.; Station Casinos, Inc.; Fleet Meehan Specialist, Inc. ST: California IN: FIN SU: RTG -0- Jan/26/2001 16:34 GMT
/FIRST AND FINAL ADD -- DCF014 -- ROBERTSON STEPHENS
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