Zacks Analyst Blog Highlights: Honda Motor Company Ltd., Eli Lilly and Co., Juniper Networks, Inc., Cisco Systems Inc. And Alcon Inc.
Wednesday, July 30, 2008 7:06 AM
Symbols: ACL, CSCO, HMC, JNPR, LLY
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: Honda Motor Company Ltd. (NYSE: HMC), Eli Lilly and Co. (NYSE: LLY), Juniper Networks, Inc. (Nasdaq: JNPR), Cisco Systems Inc. (Nasdaq: CSCO) and Alcon Inc. (NYSE: ACL).

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Here are highlights from Tuesday's Analyst Blog:

Honda Growing Asian Business

Honda Motor Company Ltd. (NYSE: HMC) is expanding its business in Asia, growing its global network to increase efficiency and introducing new products to satisfy local markets. Further, capacity expansion plans in Asia, and a new sales strategy in Japan inspire optimism about Honda's future prospects.

However, rising raw material prices and selling and administrative expenses are likely to pressure margins. Moreover, unfavorable currency exchange rates, flat-to-lower sales in its key markets (North America) and increased competition will threaten HMC's global position. Therefore, we maintain our Hold rating with a six-month target price of $35.50.

Eli Lilly with Pipeline Issues

Eli Lilly and Co. (NYSE: LLY) is entering a challenging period, brought about by recent pipeline disappointments, most notably uncertainty surrounding antiplatelet drug, Prasugrel. We also believe that sales of schizophrenia drug Zyprexa will begin to decline in 2008 as generic Risperdal eats into market share. We see little movement in the stock until the above issues are addressed and rate the shares a Hold.

Although we remain encouraged by the strength of antidepressant Cymbalta and believe it will continue to capture sizable market share, we don't believe Prasugrel has much chance of receiving approval without more trial data and look forward to hearing back from the Food and Drug Administration towards the end of the third quarter. While the recent data on Byetta LAR for diabetes was encouraging, this bit of good news isn't enough to make up for the persistent pipeline problems.

Juniper Faces Stiff Competition

Juniper Networks, Inc. (Nasdaq: JNPR) is enjoying robust growth in its infrastructure business as service providers are spending on next generation networks. Although its Service Layer Technologies (SLT) business has been disappointing, we believe the service provider market to be enough for sustaining recent momentum. In light of this, we maintain a Hold recommendation on the shares of JNPR and raise our six-month price target to $28.00.

Juniper faces stiff competition in each of its market segments, especially from industry leader Cisco Systems Inc.


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