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Jazz Pharma Rises As Competitive Position Grows Stronger

Specialty drugmaker Jazz Pharmaceuticals ( JAZZ ) was trading up Wednesday morning as its lead drug staved off competition until the end of 2025, even though the company missed Q1 estimates late Tuesday. Jazz has been embroiled in litigation over its narcolepsy treatment Xyrem, as seven different generic-drug makers have been challenging its aging patents. On Tuesday’s earnings conference call with analysts, CEO Bruce Cozadd said that Jazz had reached a confidential settlement with two of them, Ranbaxy and Wockhardt Bio, which would allow them to start selling generic Xyrem, but not until Dec. 31, 2025. The news led Mizuho Securities analyst Irina Koffler to upgrade Jazz Pharma stock to buy from neutral, and raise the price target to 193 from 137. “Jazz’s announcement of its late 2025 Xyrem settlements was the upgrade signal we were looking for,” Koffler wrote in a research note. Bargaining From Strength Leerink analyst Jason Gerberry raised his price target to 198 from 137 while maintaining an outperform rating. He wrote that the patent launch was a year later than he’d been modeling, and came after last month’s favorable decision from the patent office declining to institute 18 claims Ranbaxy made against Jazz’s Xyrem patent, meaning that Ranbaxy would have to take Jazz to open court instead of banking on an inter partes review (IPR) ruling set for July. “Given favorable first-half developments in the IPR dispute … we believe Jazz is well positioned to entice the other challengers to accept similar settlement terms, eliminating an important stock overhang,” Gerberry wrote in his research note. The news lifted Jazz Pharma stock as much as 5.5% in early trading on the stock market today , though by midday shares were up just 1.5%, near 150, as Jazz reported a weak first quarter. Jazz’s earnings rose 14% over the year-earlier quarter to $2.26 a share, 5 cents short of analysts’ consensus, according to Thomson Reuters. Revenue climbed 9% to $336 million, missing consensus by almost $3 million. Jazz nonetheless added 20 cents to its 2016 EPS range, now $11.10 to $11.50, while affirmed revenue guidance of $1.49 billion to $1.55 billion. The earnings hike came entirely through share repurchases. Last year, the company made $9.52 a share on $1.325 billion in sales.

Apple Stock Gets Price-Target Cut On Longer iPhone Upgrade Cycle

Apple ( AAPL ) stock dipped Wednesday following a price-target cut by investment bank UBS. Apple shares were down a fraction, near 93, in midday trading on the stock market today . UBS analyst Steven Milunovich reiterated his buy rating on Apple stock but lowered his 12-month price target to 115 from 120. Milunovich also reduced his sales and earnings estimates for fiscal years 2016 and 2017 based on a more cautious view of iPhone growth. Apple’s fiscal 2016 ends Sept. 24. “Our installed base analysis reflects that the iPhone 6 was unusually well received, as perhaps 37% of the installed base entering fiscal 2015 purchased a new iPhone,” Milunovich said in a research report. “The ramification is being felt in fiscal 2016 with a much lower 25% upgrade rate expected. “Our base case for fiscal 2017 is total iPhone unit growth of 4% to 217 million based on a 23% upgrade rate and a decline in new customers.” Milunovich said his base case assumes that iPhone owners upgrade their handsets every 2.5 years. On Tuesday, Drexel Hamilton analyst Brian White said “ gloom and doom ” sentiment around Apple stock had reached “extreme” levels. He reiterated his buy rating on Apple stock, with a price target of 185. RELATED: When Tim Cook Gives A TV Interview, Apple Investors Should Beware

Canadian Solar Beats Q1 Views; Yingli Ducks SunEd Bankruptcy Path

Canadian Solar ( CSIQ ) stock rocketed Wednesday on an across-the-board Q1 beat, as fellow solar panel-maker Yingli Green Energy Holding ( YGE ) announced it can’t repay 1.7 billion yuan ($263 million) in loans due Thursday. Yingli also reported fiscal Q4 sales and module shipments that missed Wall Street views, but better-than-expected losses. Canadian Solar stock, which touched an eight-month low Tuesday, was up 13% in morning trading Wednesday, near 17.50. Yingli stock, which has traded below 5 all year, was up a fraction in morning trading on the stock market today . IBD’s 20-company Energy-Solar industry group, which hit a three-year low Tuesday, was up 2.5% on Canadian Solar’s Q1 beat. And Chinese solar manufacturers JinkoSolar ( JKS ), Trina Solar ( TSL ) and JA Solar ( JASO ) were up 5%, 4% and 2.5%, respectively, on Yingli’s report. For Q1, Canadian Solar reported $721.4 million in sales and 39 cents earnings per share ex items, down a respective 16% and 62.5% vs. the year-earlier quarter, the fourth straight quarter of declines for both metrics. Still, both measures topped the consensus of 10 analysts polled by Thomson Reuters for $663.7 million and 14 cents. Canadian Solar reported 1.198 gigawatts in module shipments, down 3%, but beating its own views for 1.085 GW to 1.135 GW. Current-quarter guidance for $710 million to $760 million would be up 15% at the midpoint and beats the consensus for $702.4 million. Module shipments were guided up 44% vs. the year-earlier quarter to 1.2 GW to 1.25 GW. Yingli Debts Under Negotiation Yingli said early Wednesday it’s negotiating with creditors to restructure its medium-term loans which mature Thursday. The company is also “negotiating privately with potential strategic investors” and considering selling assets to improve its debt-to-equity ratio. Potential asset sales include land-use rights for which subsidiary Hainan Yingli received 265 million yuan ($40.8 million) in 2015 and expects the balance of 470 million yuan $72.3 million) this year. The company has reported year-over-year quarterly losses since December 2011. Its loan negotiations follow a month after giant U.S. solar developer SunEdison filed for bankruptcy after technically defaulting — unless extensions were granted — on $725 million in second-lien loans. For its fiscal Q4 ended Dec. 31, Yingli reported $325.7 million in sales and a 71-cent per-share loss ex items. Sales fell 41% year over year, but losses shrank from a $4.90 per-share loss in the year-earlier quarter. The consensus modeled $372.3 million and a $1.48 per-share loss ex items. Yingli wrapped up fiscal 2015 with $1.54 billion in sales, down 26%, and a $1.98 per-share loss minus items vs. $12.10 in year-ago losses. Analysts expected $1.63 billion and a $31.30 per-share loss. On a year-over-year basis, module shipments for fiscal Q4 and the year fell 51% and 27%, respectively, to 460.4 megawatts and 2.45 GW. For the current quarter, Yingli guided to 480 MW to 510 MW in module shipments, down 34% at the midpoint. Wall Street view $414.4 million in fiscal Q1 sales, down 12%, and a $1.11 per-share loss ex items, shrinking from $3.60 in the year-earlier quarter.