The Zacks Analyst Blog Highlights: Baxter International, NuVasive, Hill-Rom
Holdings, LM Ericsson Telephone and Becton, Dickinson
CHICAGO, Jan. 23, 2013
CHICAGO, Jan. 23, 2013 /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 Baxter International (NYSE:BAX),
NuVasive Inc. (Nasdaq:NUVA), Hill-Rom Holdings, Inc. (NYSE:HRC), Becton,
Dickinson and Company (NYSE:BDX) and LM Ericsson Telephone Company
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Here are highlights from Tuesday's Analyst Blog:
Earnings Preview: Baxter
Baxter International (NYSE:BAX) is set to report its fourth-quarter 2012
results before the opening bell on Thursday, Jan 24. Let's see how things are
shaping up prior to the announcement.
In the last quarter, the company did not post any earnings surprise reflecting
indifferent performance by the company.
Factors to Consider This Past Quarter
The news regarding Baxter still remains somewhat mixed. On the positive side,
Baxter's focus on life-sustaining products which are not commoditized, partly
insulate it from an economic downturn. The company is able to generate
recurring revenues, and consistent cash flow, due to its focus on chronic
diseases. Among other positive factors, Baxter retains a strong product
pipeline with several products in late-stage clinical development.
On the flip side, despite resilience in certain sub-segments, we are concerned
about relative stagnation in sales, a slightly somber outlook for hospital
spending and tightening of reimbursement.
Improved execution has lifted sentiment somewhat toward Baxter. It is a good
bet for value investors willing to wait as fundamentals improve further.
Our proven model does not conclusively show that Baxter is likely to beat
earnings estimates this quarter. That is because a stock needs to have both a
positive Earnings ESP (Expected Surprise Prediction) (Read: Zacks Earnings
ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. This
is not the case here as you will see below.
Zacks Earnings ESP: The Most Accurate estimate stands at $1.25, while the
Zacks Consensus Estimate is pegged at $1.26. This comes to a difference of
Zacks Rank #3 (Hold). Baxter's Zacks Rank #3 (Hold) lowers the predictive
power of ESP. The Zacks Rank #3 together with negative ESP earnings makes
surprise prediction difficult.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows they
have the right ingredients to post an earnings beat this quarter:
NuVasive Inc. (Nasdaq:NUVA), Earnings ESP of 72.73% and Zacks Rank #1 (Strong
Hill-Rom Holdings, Inc. (NYSE:HRC), Earnings ESP of 2.27% and Zacks Rank #2
Becton, Dickinson and Company (NYSE:BDX), Earnings ESP of 3.25% and Zacks Rank
Ericsson Acquires French Company
LM Ericsson Telephone Company (Nasdaq:ERIC) recently announced its intention
to acquire the Telecom & Media subsidiary of France-based consulting company,
Devoteam. This acquisition is in line with Ericsson's strategy of expanding
its IT capabilities.
Devoteam is a leading player in the information and communications technology
consulting across Europe, Middle East and Africa.
The company's core competency lies in consulting and systems integration for
operations and business support, service delivery platforms and applications,
IP Multimedia Subsystems, IP and radio networks and TV. This deal also
includes the acquisition of TV SmartVision operations.
This deal is also consistent with Devoteam's 2015 strategic plan to become a
niche player and focus more on the company's value propositions.
Prior to this deal, Ericsson has been a key business partner for Devoteam in
the United Kingdom and the Mediterranean regions. Therefore, this acquisition
is expected to further strengthen the alliance between the two companies
The deal is expected to be complete by second quarter of 2013 whereby all the
400 professionals from Devoteam's subsidiary will be joining Ericsson.
However, the closure is subject to regulatory compliance and procedures.
Ericsson seeks to gain expertise in complex, strategic and technical
consulting assignments through the acquisition, which will enable it to
enhance customer value. Apart from this, Ericsson has completed two major
acquisitions of Telcordia and Conceptwave in the recent past.
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