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Analyst Actions: Elan, Sun Microsystems, VistaPrint

From Standard & Poor's Equity ResearchCARIS REITERATES SELL ON ELAN

On July 31, Biogen (BIIB) and Elan (ELN) reported two new cases of brain disease in multiple sclerosis (MS) patients treated with Tysabri. Caris analyst David Moskowitz says despite a number of PML reports in FDA's Adverse Events database, Elan continued to posture that these incidences were of no concern. In fact, he says the company's recent strategy has been to push drug aggressively.

Moskowitz says today's cases should not be a surprise. He believes that if the drug is not withdrawn from market, sales growth is likely to be severely hampered, given this news and the likelihood that more cases will emerge.

He cuts in-market sales estimates for the product to $781 million from $876 milion in 2009 and to $934 million from $1.39 billion in 2010. With his peak sales estimate for Tysabri declining from $3.6 billion to $1.34 billion, he lowers price target on shares from $15 to $9.


Banc of America analyst Scott Craig says while revenue is expected to be in the low single digits, Sun Microsystems (JAVA) expects fiscal year 2009 GAAP operating income of 5%-7% vs. his previous estimate of 8%. He says management indicated it's using the range due to uncertainties associated with the U.S. economy.

Craig continues to believe JAVA's recently announced restructuring program does not go far enough, particularly in difficult revenue environment; and if a negative mix shift continues, both will result in gross margin pressure. He does not believe JAVA has done enough in its cost cutting actions, and believes the company must consider much more meaningful cost reduction, above and beyond what it announced at the end of last quarter.

He keeps a buy recommndation on the stock.


Stifel Nicolaus analyst Scott Devitt says VistaPrint's (VPRT) fourth quarter revenues of $110.4 million beat his $106.6 million forecast, while cash EPS of $0.32 bettered his and Street's by $0.02.

He says more robust revenue growth and operating efficiencies derived from lower sales and marketing expenses provided EPS upside. He notes international growth accounted for 39% of revenue and accelerated by 300 basis points sequentially to 65% year-over-year growth.

Devitt thinks the company's gross margin is stabilizing and it is focused on removing referral revenue. Meanwhile, he says operating margin is increasing and capital intensity is lessening, which could allow for as much as $40 million in free cash flow in fiscal year 2009 (June).

He raises $1.16 fiscal year 2009 (June) EPS estimate to $1.19. He has a $35 price target on the stock.

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