Still Hold Wyeth
Wyeth (WYE ): Still 3 STARS (hold)
Analyst: Herman Saftlas
The shares have fallen sharply following the release of a negative Prempro study: A major clinical trial of 16,000 women comparing Wyeth's Prempro estrogen/progestin hormone replacement therapy to placebo was halted early after Prempro was linked to higher risk of cardiovascular disease and breast cancer. Prempro was expected to account for about 5% of Wyeth's sales this year. Estrogen-only hormone replacement therapy did not raise breast cancer risk. We still see benefits of hormone therapy outweighing risks for most patients. Wyeth is now valued at a steep discount to the big-pharma industry multiple.
Pepsi Bottling (PBG ): Reiterates 4 STARS (accumulate)
Analyst: Richard Joy
The company reported Q2 EPS of $0.47 vs. $0.41, as expected. Comparable worldwide physical case volume gained 2%, with average pricing up a strong 3%. EBITDA was up 11% on volume and pricing gains. Market shares were higher for carbonated soft drinks and bottled water segments. Strong new product activity should continue Pepsi Bottling's momentum. We are keeping our 2002 EPS estimate at $1.45. We see 2002 EBITDA gaining 11%-12% on pricing and volume gains. The shares remain attractive given earnings visibility, superior marketplace execution, and strong growth across the Pepsi beverage portfolio.
Aspen Technology (AZPN ): Downgraded to 3 STARS (hold) from 4 STARS (accumulate)
Analyst: Mark Basham
Ongoing uncertainty regarding the timing and magnitude of economic recovery led to a revenue shortfall of about $8 million in Aspen's fiscal Q4, compared to prior expectations of $92 million. S&P's view is that Aspen needs to make further permanent reductions in its cost structure as revenues shape up to be in line with our estimate, while costs were not reduced as much as we had expected. We see a $0.75 loss per share for fiscal 2002 (ending June), and further reduce our fiscal 2003 EPS estimate, from $0.55 to $0.30. We now rate the stock hold, based on U.S. recovery hopes.
Citrix Systems (CTXS ): Still 3 STARS (hold)
Analyst: Scott Kessler
We are keeping our rating on the shares despite the company's disappointing Q2 preannouncement. We are reducing revenue and EPS estimates, reflecting still-sluggish IT spending. We're also cutting our forecasts for Q2 sales by 13% to $117 million and for EPS by $0.05 to $0.08. We don't see any signs of a demand recovery for Citrix products, even with the new NFuse Elite offering. We're dropping our 2002 estimates for sales by 17% to $489 million and EPS from $0.66 to $0.42. Management commented on its July 8 conference call that 2003 growth would be flat. Despite demand and execution concerns, Citrix has estimated Q2 net cash and securities of $374 million.