Zacks Bull and Bear of the Day Highlights: Alkermes, China Life Insurance,
Chipotle Mexican Grill, Panera Bread and Jack in the Box
CHICAGO, Jan. 21, 2013
CHICAGO, Jan. 21, 2013 /PRNewswire/ --Zacks Equity Research highlights
Alkermes (Nasdaq:ALKS) as the Bull of the Day and China Life Insurance
(NYSE:LFC) as the Bear of the Day. In addition, Zacks Equity Research provides
analysis on Chipotle Mexican Grill Inc. (NYSE:CMG), Panera Bread Co.
(Nasdaq:PNRA) and Jack in the Box Inc. (Nasdaq:JACK).
Full analysis of all these stocks is available at
Here is a synopsis of all five stocks:
Bull of the Day:
We are impressed by the expanded product portfolio at Alkermes (Nasdaq:ALKS)
following its purchase of Elan's EDT unit. The company continues to expect
adjusted earnings per share in the range of $0.88-$1.02 for fiscal 2013.
Revenues are still projected in the range of $510-$540 million.
The US approval of type II diabetes drug Bydureon is a major positive for
Alkermes as the drug offers significant commercial potential. We are also
pleased by the diversified pipeline at Alkermes. The successful development
and commercialization of these candidates should boost the company's top line.
We believe that the current price represents an attractive entry point for
long-term investors and hence upgrade the stock to Outperform. Our price
target of $27.00 is based on 6.8x our fiscal 2013 revenue estimate.
Bear of the Day:
We are downgrading our recommendation on China Life Insurance (NYSE:LFC) to
Underperform based on the constant decline in operating cash flow, which is
affecting the financials. The gradual decline in premiums and increasing
competition on the domestic front are the other downsides.
The company also faces substantial interest rate and currency risks, which
limit upside. China Life also reported a net loss in the third quarter, due to
a surge in operating expenses, which offset the operating income increases.
The company has a strong brand name, an extensive domestic distribution
channel, strong investments and stable ratings. However, our six-month target
price of $46.00 equates to 48.4x our earnings estimate for 2012. Combined with
the $0.55 per ADR annual dividend, this target price implies an expected
negative return of 9.4% over that period.
Latest Posts on the Zacks Analyst Blog:
Chipotle to Cater Beyond Stores
In order to counter sluggish same-store sales performance in a cutthroat
environment, Chipotle Mexican Grill Inc. (NYSE:CMG) is banking on a new sales
generating initiative. This Denver-based company will start its catering
service in its home court Colorado beginning Jan 21 and expand it across the
nation in due course.
Basically, management intends to capitalize on the reputation of Chipotle's
products by offering an off-premise service. The service will allow groups of
20 to 200 guests to select meals as per their own preference as they do at
Chipotle restaurants. This initiative will make Chipotle go beyond its outlets
and cater to its customers in their homes, schools and offices, which will
further enhance the company's presence.
Although Chipotle's fourth quarter 2012 revenue is expected to increase 17.2%
year over year, of late, the company has been reeling under comps pressure.
Its same-store sales gain of 4.8% during the third quarter marked a 650 basis
points (bps) downfall year over year and 320 bps sequentially. For the fourth
quarter, Chipotle is likely to post 3.8% comps growth, which will again be a
sequential decline of 100 bps.
Apart from launching a catering service, Chipotle will also test a new
vegetarian offering called Sofritas in San Francisco Bay Area next month. If
successful in its test run, the product will be rolled out in additional
Chipotle's innovative offerings always distinguish it from its peers. It
already has its 'Food With Integrity Program' in store that focuses on a
higher mix of naturally raised pork, chicken and beef, and organic produce. It
is the only national restaurant company to use fresh produce since 2008.
However, as far as catering is concerned, Chipotle is not the only company to
use this as an incremental sales driver. One of its close peers
Panera Bread Co.
) is benefiting largely from this initiative. Panera's catering business has
expanded about 20% over the past 10 years, which is anticipated to witness a
further boost from the convenient online ordering option.
There is also Jack in the Box Inc.'s (Nasdaq:JACK) Qdoba Mexican Grill chain
that offers catering services. We believe, like some of its industry
equivalents, catering will prove to be a strong growth driver for Chipotle in
the years to come. Chipotle currently retains a Zacks Rank #3 (Hold).
Get the full analysis of all these stocks by going to
About the Bull and Bear of the Day
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