The Zacks Analyst Blog Highlights: Amgen, Freeport-McMoRan Copper & Gold,
Plains Exploration & Production, McMoRan Exploration and Atlatsa Resources
CHICAGO, April 23, 2013
CHICAGO, April 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 Amgen Inc. (Nasdaq:AMGN),
Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), Plains Exploration &
Production Company (NYSE:PXP), McMoRan Exploration Co. (NYSE:MMR) and Atlatsa
Resources Corporation (AMEX:ATL).
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Here are highlights from Monday's Analyst Blog:
Will Amgen Beat Earnings?
We expect Amgen Inc. (Nasdaq:AMGN) to beat earnings expectations when it
reports first-quarter 2013 results after the closing bell on Apr 23, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Amgen has the right combination of two key
ingredients to beat earnings.
Positive Zacks ESP: The earnings Expected Surprise Prediction (ESP) (Read:
Zacks Earnings ESP: A Better Method) for Amgen is +1.14% – the difference
between the Most Accurate earnings estimate of $1.77 per share and the Zacks
Consensus Estimate of $1.75 per share. This indicates a likely positive
Zacks Rank #3 (Hold): Note that stocks with Zacks Rank of #1, #2 and #3 have a
significantly higher chance of beating earnings. The Sell rated stocks (#4 and
#5) should never be considered while going into an earnings announcement.
The combination of its Zacks Rank and Earnings ESP for Amgen makes us
confident of a positive earnings surprise in the to-be-reported quarter.
Drivers of Better-than-Expected Earnings
This biotech company has delivered positive earnings surprises in three of the
last four quarters with an average beat of 11.43%. Key growth drivers at Amgen
include Enbrel, Xgeva and Prolia.
We are also impressed by Amgen's efforts to expand in key markets. Moreover,
the company's moves to launch new manufacturing technologies coupled with the
efforts to develop its pipeline are encouraging.
Freeport, Plains Set Date for Merger Vote
Mining giantFreeport-McMoRan Copper & Gold Inc. (NYSE:FCX) said that Plains
Exploration & Production Company (NYSE:PXP) will hold a special shareholders'
meeting on May 20 to vote on the proposed buyout of Plains by Freeport.
Shareholders who held Plains shares at the close of business on Mar 21, 2013,
are entitled to vote on the merger.
Freeport, in Dec 2012, forged definitive merger pacts to buy Plains and
McMoRan Exploration Co. (NYSE:MMR) for roughly $9 billion. The move represents
a part of the company's strategy to diversify away from its bread-and-butter
copper mining business.
Per the agreement, Freeport is buying Tex.-based independent oil and gas
company Plains for $50 per share in cash and stock. Plains shareholders have
been given an option to receive cash or stock. Freeport is expected to pay
$6.9 billion in cash to buy Plains.
Moreover, Freeport is paying $14.75 per share in cash to buy La.-based
exploration and production company McMoRan. McMoRan shareholders will also get
1.15 units of a royalty trust for each share they hold. While the total deal
value is $3.4 billion, the actual cash portion of the transaction is $2.1
billion (excluding 36% interest currently owned by Freeport and Plains).
The total transaction value for the twin deals is roughly $20 billion taking
into account the debt to be assumed by Freeport as part of the deal. The
transactions are subject to regulatory clearances and approval of the
shareholders of the respective companies and are expected to consummate in
The merger is expected to make the combined entity a leading natural resource
conglomerate in the U.S., leveraging Freeport's industry-leading mineral
assets and the oil and gas resources of Plains and McMoRan. The addition of
Plains' established oil production assets and McMoRan natural gas drilling
capabilities and shallow water ultra-deep properties will provide Freeport a
significant exposure to energy markets.
Freeport expects the combined entity to generate operating cash flows of
roughly $9 billion and earnings before interest, taxes, depreciation, and
amortization (EBITDA) of around $12 billion in 2013. Roughly 74% of the
combined company's projected EBITDA is expected to derive from mining with the
balance coming from oil and gas. The company sees significant synergies from
Freeport currently holds a short-term Zacks Rank #3 (Hold).
Atlatsa Resources Corporation (AMEX:ATL), which also belongs to the mining
industry, retains a Zacks Rank #2 (Buy).
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