Let’s take a look at analysts’ morning notes.
HUMAN GENOME SCIENCES (HGSI):
- BARCLAYS: Bullish. With FDA highlighting a patient population ranging from 300,000 to 1.5 million with data supporting potential reduced flare and steroid sparing benefits, this press release was better than expected. Product availability expected in two weeks and pricing of $35,000 was above our $30,000 estimate.
- CITI: Benlysta approval was expected. While the label did not have any contra-indications that were concerning, the overall tone of the label was more onerous than we had anticipated in that it highlighted all the areas where Benlysta’s activity was equivocal. On average, the gross price will be $40k for the first year and $35k/year thereafter.
EXXON MOBIL (XOM):
- CREDIT SUISSE: Solid growth expected. Although messages were similar to 2010, a $5 billion buyback this quarter and triple digit oil prices add a supportive backdrop to XOM’s 2011 meeting – XOM’s decline rate is slowing and its reinvestment opportunity set is deep, including liquids.
- GOLDMAN SACHS: Long-plateau exploration and production projects and unconventional resource growth is starting to drive lower base decline rates and more manageable, albeit modest, production growth targets.
- BARCLAYS: Move with Engenio is interesting. We like the potential for the EPS deal but we think investors may need some time to sift through the deal. Engenio’s attributes include lower margins, a play on black data and risky revenue into server OEM’s that could be lost.
- DEUTSCHE BANK: Potential with Engenio deal. Given the attractive valuation and the resulting $5 billion expansion by 2014, we see the potential upside as outweighing the risks. Maintain buy.
- DEUTSCHE BANK: Catalyst Health sale will make no impact on earnings. The deal is expected to be finalised by the end of June 2011, and will add costs to WAG of about $40MM to help customers make the transition to Catalyst.
MARATHON OIL (MRO):
- OPPENHEIMER: Strong outlook. Higher oil prices and improving R&M outlook will make up for the impact of lost oil production from Libya which is less profitable than the rest of its production.
AMERICAN EAGLE (AEO):
- MORGAN STANLEY: Needs better results. Fourth quarter earnings were slightly ahead of estimates. AEO also announced CEO Jim O’Donnell will retire once a successor is named and after a transition period. It plans to revitalize the women’s tops assortment, raise accessories penetration, expand internationally and build on success in denim and bottoms which is encouraging.
- BANK OF AMERICA: Numerous challenges for 2011. Reiterate underperform.
WALT DISNEY COMPANY (DIS):
- GOLDMAN SACHS: Big Shanghai opportunity. The Shanghai government has published a site map of Disney’s planned theme park in the region and it may be bigger than Disneyland. Park is set to open in 2015. It will cover 950 acres and will include a Magic Kingdom theme park, three hotels and entertainment facilities. The cost for phase one will be $3.7 billion.
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