The Zacks Analyst Blog Highlights: General Mills, Kellogg, Novartis, Novo Nordisk and Johnson & Johnson

  The Zacks Analyst Blog Highlights: General Mills, Kellogg, Novartis, Novo
                        Nordisk and Johnson & Johnson

PR Newswire

CHICAGO, Dec. 18, 2012

CHICAGO, Dec. 18, 2012 /PRNewswire/ --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 General Mills Inc. (NYSE:GIS),
Kellogg Company (NYSE:K), Novartis (NYSE:NVS), Novo Nordisk (NYSE:NVO) and
Johnson & Johnson (NYSE:JNJ).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

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Here are highlights from Monday's Analyst Blog:

Earnings Preview: General Mills



Consumer food giant, General Mills Inc. (NYSE:GIS) is all set to unveil its
second quarter fiscal 2013 results before the start of trading on December 19,
2012. The Zacks Consensus Estimate for the second quarter is 79 cents
(estimated year-over-year improvement of 3.6%) on revenues of $4.87 billion
(year-over-year increase of 5.3%).



First Quarter 2013 Recap

General Mills' first quarter fiscal 2013 adjusted earnings rose 3.1% year on
year to 66 cents per share, beating the Zacks Consensus Estimate by 6.5%. The
earnings upside was in contrary to management's expectations that earnings
would drop from the year-ago levels. The upside was driven by recent
acquisitions, low advertising expense and tax rate, and solid international
results.



Total revenue increased 5% year over year to $4.05 billion. Revenues mostly
benefited from recent acquisitions. Revenues marginally missed the Zacks
Consensus Estimate of $4.07 billion.



Agreement of Estimate Revisions

There has been no estimate revision for the current quarter over the last 7 or
30 days. However, for fiscal 2013, 1 of 9 estimates moved down over the past
30 days. None of the estimates has been revised upward. There has been no
estimate revision over the past 7 days for the fiscal year.



General Mills did not announce any major news since the announcement of its
earnings results in September, which explains the stalemate in estimate
revisions.



Magnitude of Estimate Revisions

Given the limited estimate revisions, the consensus estimate for the second
quarter has remained static over the last 7 days at 79 cents. However, for
fiscal 2013, the estimate has gone down by a penny over the last 30 days from
$2.67 to $2.66. The fiscal 2013 estimate has remained static over the last 7
days.



Surprise History

General Mills has surpassed earnings estimates in two of the last four
quarters, while missing in two. It recorded a maximum positive surprise of
6.45% in the first quarter of fiscal 2013. On average, the earnings surprise
was a positive 1.08% in the trailing four quarters.



Our Recommendation

We currently have a Neutral recommendation on General Mills. However, the
stock carries a Zacks #2 Rank (a short-term Buy rating), reflecting the
momentum following the better-than-expected first quarter results.



We are encouraged by the company's strong market share position in some
leading food categories, its growing international presence, strategic
acquisitions and focus on innovation and brand support. These growth
initiatives combined with the cost-saving efforts bode well for the company's
long-term growth.



However, we prefer to remain on the sidelines until the U.S. retail volumes
improve, the Yoplait yogurt business delivers and the macroeconomic
environment recovers substantially.



Peer company Kellogg Company (NYSE:K) carries a Zacks #3 Rank.



U.S. Approval for Novartis' Signifor

The US Food and Drug Administration ("FDA") recently approved Novartis'
(NYSE:NVS) Signifor (pasireotide) to treat adults suffering from Cushing's
disease for whom pituitary surgery is not an option or has not been effective.



The approval from the US regulatory body did not come as a surprise as in
November this year the FDA's Endocrinologic and Metabolic Drugs Advisory
Committee (EMDAC) gave a positive opinion on the use of Signifor as a
treatment for Cushing's disease.



The FDA's decision was based on positive results from the phase III
PASPORT-CUSHINGS (PASireotide clinical trial PORTfolio - CUSHING'S disease)
study. Novartis conducted the study to evaluate the safety and efficacy of
Signifor in 162 patients with recurrent Cushing's disease, and newly diagnosed
patients with Cushing's disease for whom surgery is not recommended.



Results from the study showed that after treatment with Signifor, patients
experienced lower urinary free cortisol (UFC) levels, a measure of disease
control. The study also revealed that certain clinical manifestations of
Cushing's disease tended towards improvement.



We remind investors that in April this year, Signifor was approved in the EU
for the treatment of adults suffering from Cushing's disease who are either
ineligible for surgery or have had unsuccessful surgeries. Novartis is
currently looking to get the drug approved worldwide.



We are pleased with the US approval of the drug. Signifor, the first FDA
approved medicine for the treatment of Cushing's disease, is sure to have a
potential market in the US.



Other than Cushing's disease, Novartis is also evaluating Signifor in phase
III studies for the treatment of acromegaly syndrome.



Currently, we have a Neutral recommendation on Novartis. Novartis carries a
Zacks #3 Rank (Hold) in the short run. However, other pharma companies like
Novo Nordisk (NYSE:NVO) and Johnson & Johnson (NYSE:JNJ) carry a Zacks #2 Rank
(Buy).



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