Zacks Equity Research highlights CRA International (Nasdaq: CRAI) as the Bull of the Day and Auxilium Pharmaceuticals (Nasdaq: AUXL) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on D.R. Horton (NYSE: DHI) and Pozen, Inc. (Nasdaq: POZN). Full analysis of all four stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all four stocks:
Bull of the Day:
Our Bull of the Day recommendation is for CRA International (Nasdaq: CRAI). We maintain our Buy rating for CRA International following the release of inline Q1 results. We expect the company to continue to benefit from strong demand for its services, both domestically and in international markets. We are also encouraged by ongoing acquisition activity, which has expanded the company’s European presence and existing service offerings. We consider the approximate 6% decline in the stock price yesterday following the release of Q1 results to be unwarranted, and we reiterate our Buy rating on share of CRAI. Our target price is $60.
Bear of the Day:
Our Bear of the Day recommendation is for Auxilium Pharmaceuticals (Nasdaq: AUXL), a specialty pharmaceutical company focused on treating diseases and conditions that accompany aging. The company’s only approved product is Testim, a 1% testosterone gel indicated for the treatment of hypogonadism. We are concerned that the termination of Auxilium’s co-promotion agreement for Testim could have a negative impact on the product’s growth prospects. We are also worried about the renewed promotional efforts behind Testim’s main competitor in the gel prescription market - AndroGel (Solvay Pharmaceuticals), which is the current market leader. We do not see Auxilium achieving profitability over the next few years and recommend investors to avoid the name. We rate the stock a Sell with a price target of $10.50.
Analyst Blog:
D.R. Horton (NYSE: DHI) reported first quarter EPS [earnings per share] of $0.50, below our expectations of $0.78, due to greater-than-anticipated gross margin pressure. Average selling prices fell in three of the six markets DHI serves, and we believe there is heightened risk of price decline in the other three markets by year-end. With inventories still high nationwide, the company will try to reduce costs to bring down selling prices and boost demand. However, this will not completely solve the affordability picture, a general rise in income, and drop in mortgage rates are also needed. Without these macro factors turning more positive, we expect increased incentive use to keep gross margins under pressure for the rest of FY07 [fiscal year 2007].
Pozen, Inc. (Nasdaq: POZN) announced after the close of the bell yesterday that its amended response to a previous approvable letter for Trexima has been accepted for review by the FDA [Food & Drug Administration]. The agency also notified Pozen that it expects a Class II review (six months), which could result in a decision date of August 1, 2007.
Get the full analysis of all four stocks by going to http://at.zacks.com/?id=2649.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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