Pfizer and Wyeth
CHICAGO--(BUSINESS WIRE)--March 06, 2008
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: Ambac Financial Group, Inc.
(NYSE: ABK), Onyx Pharmaceuticals (Nasdaq: ONXX), Pfizer (NYSE: PFE)
and Wyeth (NYSE: WYE).
See the latest posts to the Analyst Blog here:
Here are highlights from Wednesday's Analyst Blog:
Breaking Down Ambac's News
Earlier today, Ambac Financial Group, Inc. (NYSE: ABK) announced
it would sell at least $1.5 billion in stock and convertible
securities to help boost capital levels at its main insurance unit,
which has been facing potential ratings downgrades. While this move
should help to retain its current credit rating presently, it is
abundantly clearly the market was not pleased.
- By selling $1.0 billion in new shares (using $10 per share), ABK
would substantially dilute its shares outstanding -- basically a
- Considering that we are at the beginning of mortgage meltdown
versus the trough, we view the $1.5 billion in additional capital as
more of a "Band-aid effect" to the problem.
- ABK is also attempting to shore up its capital base by
suspending new business in the riskiest segment of the market. While
capital may improve from this action over time, earnings will be
hampered over the near-term.
We rate the share of ABK a Sell. Our six-month target price is
Downgrading Onyx Pharma to a Hold
Onyx Pharmaceuticals (Nasdaq: ONXX) lost one key near-term
catalyst due to the early termination of its phase III ESCAPE trial of
Nexavar for lung cancer on Feb 18, 2008. The failure also cast shadow
for Nexavar's long-term potential. Although worldwide Nexavar sales
continued growth in 4Q07, U.S. sales has been under great pressure due
to heavy competition in the kidney cancer market.
We believe Nexavar sales will continue to grow over the next
several years since the label has expanded to liver cancer, but the
potential has been limited without the indications of lung cancer and
melanoma. Therefore, we maintain our Hold rating on Onyx shares with a
price target of $31.
Although worldwide Nexavar sales continued its momentum in the
fourth quarter of 2007, we see increase pressure on US sales of the
drug in the U.S. kidney market. Competition is heavy and comes from
Pfizer's (NYSE: PFE) Sutent and Wyeth's (NYSE: WYE) Torisel.
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