Analyst Picks and Pans: Dendreon (DNDN), VF Corp. (VFC)

Dendreon Corp. (DNDN)

Needham upgrades to buy from hold

Needham analyst analyst Mark Monane said on Apr. 29 he had a chance to see the full dataset for the IMPACT trial for the first time -- and the data were as good as (and in some ways better than) results outlined by Dendreon management earlier in April. Monane said his view on Provenge commercialization is now enhanced.

The analyst set a $38 price target on Dendreon based upon his valuation model of probability-adjusted 2013 U.S. Provenge revenues of $886 milllion and royalties outside the U.S. of $102 million, and 2013 EPS of $3.31, using an 8 times revenue/27 times EPS multiple and 25% discount rate yearly. He expects Dendreon's financial resources to be sufficient for operations into the second half of 2010.

VF Corp. (VFC)

Susquehanna Financial downgrades to neutral from positive

Susquehanna Financial analyst Christopher Svezia said on Apr. 29 he was downgrading VF Corp. stock primarily on valuation and an uncertain outlook. He noted that VF's $0.91 first-quarter EPS missed his estimate by $0.04, and the Wall Street consensus by $0.03, mostly due to greater-than-expected foreign-currency exchange headwinds and weaker-than-expected International Jeanswear and Imagewear results, which accounted for about 25% of first-quarter revenue.

With the upcoming seasonally difficult second quarter, continued forex headwinds, and a difficult macro backdrop, Svezia believes VFs earnings could be suppressed in the near term. He cut his $5.42 2009 EPS estimate to $4.90 and his $5.93 2010 forecast to $5.32.

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