Stock Picks: Amgen, eBay, THQ

Wall Street analysts offer buy, sell, or hold opinions on stocks in the news on Sept. 14

Amgen: Soleil Securities initiated coverage on shares of Amgen (AMGN), the world's largest biotechnology company, with a buy rating and $65 price target on Sept. 14.

In a note, equity analyst Gene Mack said the success of a study on the company's Prolia, for the prevention of tumor metastasis, expected in the fourth quarter, "is a long shot in our view," but weakness in Amgen shares "creates a more favorable risk/reward." Mack said that if results for the Prolia study are positive, the drug could be worth $1 billion more than analysts' current peak consensus estimates of around $3.5 billion.

"Little focus has been placed on AMGN's late-stage cancer compounds AMG-479 and AMG-386," which each offer revenue potential of over $500 million, the analyst said. He said he expects investors to have greater interest as Phase III trials begin for AMG-479, for pancreatic cancer, and AMG-386, for ovarian cancer, over the next six months.

EBay: Standard & Poor's equity analyst Scott Kessler lowered a rating on shares of EBay (EBAY), the owner of e-commerce sites and the PayPal payment service, to buy, from strong buy, on Sept. 14. The price target on the shares is $27.

In a posting on the S&P MarketScope service, Kessler said he sees the potential for a further 11 percent rise in the shares in the next 12 months.

Kessler said he has been "encouraged" by plans for the company's Skype unit to stage a public offering, by further progress in eBay's payments and mobile businesses, and by legal victories over Craigslist and Tiffany.

"[W]e think risk-reward considerations warrant our less-bullish stance," Kessler said. "Nonetheless, we still see EBAY as undervalued."

THQ: Janney Montgomery Scott equity analyst Shawn Milne maintained a neutral rating and $5 fair value estimate on shares of THQ (THQI) on Sept. 14.

On Sept. 13, the publisher of wrestling and martial arts video games reduced its full-year forecast, saying it expects a loss, excluding some items, of at least 10¢ a share. The company had anticipated breaking even.

In a note, Milne said THQ is postponing the launch of its Red Faction Armageddon game from the fourth quarter of fiscal 2011 (ending March) to the first quarter of fiscal 2012. He lowered his fiscal 2011 estimates for revenue to $812 million, from $852 million, and for earnings per share (EPS) to a loss of 15¢ per share, from break-even results, due to the shift.

"We continue to believe [that fiscal 2012] is looking to be a stronger lineup—driving growth and improved margin profile," Milne said.

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