For Immediate Release
Chicago, IL – June 9, 2021 – Zacks Equity Research Shares of Urban Outfitters Inc. URBN as the Bull of the Day, Travelzoo TZOO as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Eli Lilly and Company LLY, Cassava Sciences, Inc. SAVA and Annovis Bio, Inc. ANVS.
Here is a synopsis of all five stocks:
Bull of the Day:
Based in Philadelphia, Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gifts products through its brands Urban Outfitters, Anthropologie, Free People, BHLDN, and Terrain. URBN has operations in the U.S., Canada, and Europe.
Q1 Earnings Recap
Following Urban’s first quarter earnings release, shares rose about 9% as investors were impressed with the recovery in revenue and earnings.
Total sales grew 57.6% year over year to $927 million, primarily driven by a 51% increase in comparable store sales. Comps for Anthropologie, Free People, and Urban were all up double digits.
Net income improved to $54 million, or $0.54 per share compared to a loss of $138 million, or $1.41 per share in the year-ago period.
In a press release, CEO Richard Hayne said “The first quarter was one for the record books; record sales, a record low markdown rate, and record earnings per share.”
URBN Breaks Out
In the past six months, shares of XPO have jumped more than 50% compared to the S&P 500’s 12.5% increase. Earnings estimates have been rising too, and URBN is a Zacks Rank #1 (Strong Buy) right now.
For fiscal 2022, 10 analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up 70 cents to $2.36 per share. Earnings are expected to grow considerably compared to the prior year period. Fiscal 2023 looks strong too, and earnings should see positive year-over-year growth as well.
Looking ahead, management said that sales trends have accelerated in May, and they believe that is a good sign for Q2 results. Urban isn’t the only retailer enjoying a rebound in demand right now, and if the current trend continues, shareholders could be in store for even more gains.
If you’re an investor searching for a retail sector stock to add to your portfolio, make sure to keep URBN on your shortlist.
Bear of the Day:
Travelzoo is a popular online travel website that compiles deals on hotels, flights, vacations, cruises, and local and entertainment deals for its millions of members worldwide. The company operates in North America and Europe (it recently exited its Asia Pacific business), and is headquartered in New York.
Q1 Earnings Recap
Travelzoo’s first quarter results reflect the lingering impacts of the coronavirus pandemic on the travel industry.
Consolidated revenue fell 30% year-over-year to $14.3 million (but is up 14% quarter-over-quarter). The company’s North America business decreased 23%, while its Europe segment fell 48% compared to the prior-year period.
GAAP EPS was a loss of $0.14 per share, which missed the consensus estimate.
The company had 31.8 million members at the end of Q1, and membership in North America grew 7% year-over-year to 18.1 million.
TZOO is now a Zacks Rank #5 (Strong Sell).
Two analysts have cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen 10 cents to $0.14 per share. But, earnings are expected to see a triple-digit increase for fiscal 2021 as the bottom line begins to recover from 2020.
Shares have been hot so far in 2021 as travel and recreational stocks have benefitted from optimism about the economic reopening. Year-to-date, TZOO is up 67.2%
Travelzoo expects to report significantly higher revenue and profitability for Q2, and management sees a revenue recovery trend going forward. However, there are still plenty of travel restrictions in place, as well as broad unknowns when it comes to Covid-19, so investors may want to stay on the sidelines for now.
3 Pharma Stocks Rising on FDA Approval of Alzheimer’s Drug
The Alzheimer’s disease (“AD”) market finally saw a ray of hope as the FDA granted accelerated approval to Biogen and Japan-based partner, Eisai’s Alzheimer’s drug, Aduhelm (aducanumab)on Jun 7. Aduhelm, a monoclonal antibody treatment, has been approved to reduce the accumulation of amyloid beta plaques, a sticky protein, in the brain, which is believed to lead to progression of Alzheimer’s disease.
Afatal condition that causes progressive decline in memory, AD has always been a highly challenging area, and not much progress has been made despite significant investments (both funds and resources). The drugs presently available just treat the symptoms of the disease.
Several companies have failed to develop safe and effective treatment options to treat this deadly brain disease. Several large pharma companies, including Roche and Eli Lilly, stopped development of their AD candidates in the last few years either due to low possibility of success or safety concerns.
After years of failures, Aduhelm has become the first medicine to be approved to reduce the clinical decline associated with this devastating disease. It is also the first medicine to show that removing amyloid beta results in better clinical outcomes in Alzheimer’s patients. It should bring in huge revenues for Biogen with Aduhelm’s peak sales estimated to be in the range of $3-6 billion. The drug is expected to meaningfully change the course of AD treatment.
In fact, other companies working on AD therapies saw their shares soar as FDA approval of Aduhelm improves the likelihood that these companies will also gain approval for their Alzheimer’s candidates.
Eli Lilly’s stock rose 10.2% on Monday to a record high as it is also developing an Alzheimer’s drug similar to Biogen’s called donanemab, which recently completed a phase II study in patients with early symptomatic Alzheimer’s disease. In January, the company announced that the phase II study on donanemab met its primary endpoint.
The data showed that donanemab slowed disease progression significantly by 32% compared to placebo, as measured on the integrated Alzheimer’s Disease Rating Scale (iADRS), a composite measure of cognition and daily function, over a treatment period of 76 weeks.
In addition to slowing of cognitive and functional decline, treatment with donanemab also resulted in substantial clearance of amyloid plaques and slowing of spread of tau pathology. Following the positive data, Lilly expanded the phase II study to a phase III study. Meanwhile, a phase III study in asymptomatic Alzheimer’s disease is expected to start in 2021
Lilly believes that donanemab has the potential to become a key treatment for Alzheimer’s disease.
Lilly’s shares have risen 31.8% this year so far compared with the industry’s increase of 5.5%.
Lilly has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Small-cap companies working on treatments for Alzheimer’s disease also rose. Cassava Sciences stock witnessed a 5.4% gain, while Annovis Bio rose as much as 31%. These two companies are lucrative buy opportunities for investors who are looking to profit from Alzheimer’s drug stocks, if their AD candidates are successfully developed and launched.
The company’s stock has skyrocketed 891% this year so far against the industry’s decrease of 12.6% as it has made rapid progress in the development of its AD candidate, simufilam.
This company plans to initiate two pivotal phase III studies to evaluate simufilam for mild-to-moderate AD dementia in the second half of 2021.
In February 2021, Cassava Sciences announced encouraging interim data from the open-label study of simufilam. Both cognition and behaviour scores of patients improved following six months of treatment with simufilam, with no safety issue observed.
Cassava Sciences currently has a Zacks Rank #3 (Hold).
Annovis Bio’s stock has risen 810.8% this year so far against a decrease of 4% for the industry.
Last month, Annovis Bio announced data from a phase II study on ANVS401, its lead drug candidate for the treatment of AD and Parkinson’s disease (PD). The data showed that patients treated for 25 days with ANVS401 achieved statistically significant cognitive improvement as measured by the Alzheimer’s Disease Assessment Scale–Cognitive Subscale 11 (ADAS-Cog11) test, which is one of the most frequently used tests to measure impaired cognition in clinical studies for AD.
The drug also demonstrated improvements in speed, coordination and motor function in PD patients. Overall, the data proved that ANVS401 is efficacious in both AD and PD.
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Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
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