Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: AutoNation, Inc. (NYSE: AN), Oscient Pharmaceuticals Corp. (Nasdaq: OSCI), Equity Residential (NYSE: EQR), ACADIA Pharmaceuticals Inc. (Nasdaq: ACAD) and Allergan, Inc. (NYSE: AGN).
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Here are highlights from Thursday’s Analyst Blog:
AutoNation Shares Rate a Sell
AutoNation, Inc. (NYSE: AN) is the largest automotive retailer in the U.S., and is about twice the size of its nearest competitor. As of December 2007, the company owns and operates 322 new vehicle franchises from 244 dealerships located in major metropolitan markets in 16 states, with about 75% of sales being focused in the Sunbelt region of the U.S.
We expect AutoNation to be hurt by a continuing weak new car market. The company is disproportionately exposed to Florida and California, states that will be hit the most by a slowing car market. Moreover, the credit crisis in the US led to a 12% fall in AutoNation's sales in the second quarter of 2008.
Oscient Pharma Outlook Lowers
Oscient Pharmaceuticals Corp. (Nasdaq: OSCI) focuses on cardiovascular /metabolic and respiratory diseases. The Waltham, Massachusetts-based biopharmaceutical company currently has two marketed products in its portfolio - Antara and Factive. While the sales force has done a commendable job driving growth for both products in 2007, first half 2008 results have been disappointing.
The company recently reduced its revenue guidance for the year by 4%. Oscient’s dependence on Antara for top-line growth is a matter of major concern - Antara is competing in a highly crowded cholesterol market and a slowdown in its growth rate would have a major impact on the company’s growth prospects.
Equity Residential Positioned Well
Equity Residential (NYSE: EQR), based in Chicago, Illinois, is a fully integrated real estate investment trust (REIT). It is the largest publicly traded, self-administered, and self-managed multi-family real estate operator in the U.S.
The housing market has not yet reached a bottom; thus there is a larger pool of renters. EQR continues to raise rents in most markets, although Florida continues to be a problem. With the national economic slowdown, rental rate growth will slow over the next couple of quarters.
Acadia Pharma Lacking Catalysts
Acadia Pharmaceuticals (Nasdaq: ACAD) is a biopharmaceutical company utilizing innovative technology to fuel drug discovery and clinical development of novel treatments for central nervous system (CNS) disorders. The company currently has one proprietary clinical program with pimavanserin (ACP-103) for treatment-induced dysfunction in Parkinson's disease. Other potential indications with pimavanserin include use as an adjunctive therapy for schizophrenia and for sleep maintenance in patients with insomnia.
Development in schizophrenia remains on hold until after the phase III PDP data in the second half of 2009. Management will continue to work with Allergan (NYSE: AGN) on two out-licensed candidates for chronic pain and glaucoma. However, similar to the PDP data, this will not be available until mid-2009. Therefore, we see a lack of catalysts for the next 2-3 quarters.
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