Tag: Analysts

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Business

JBS cyberattack might strain restaurant margins, analysts say

JBS cyberattack could pressure restaurant margins, analysts say

A worker walks past a mural outside the JBS SA pork processing facility in Louisville, Kentucky, United States on Friday, June 5, 2020.

Luke Sharrett | Bloomberg | Getty Images

The cyberattack on JBS, the world’s largest meat packer, could make restaurants painful if the situation is not resolved quickly, analysts say.

On Tuesday, the Brazilian company said in a statement that it had made “significant strides” in resolving the ransomware attack that was affecting operations in North America and Australia. JBS expects the vast majority of its factories to be back up and running on Wednesday. She initially disclosed the attack on Monday.

Meanwhile, beef prices have risen. The U.S. Department of Agriculture reported that select cuts of beef rose 1.1% to $ 334.56 per 100 pounds on Tuesday. According to the Steiner Consulting Group, JBS accounts for about 23% of the total cattle capacity in the USA.

Andrew Strelzik, an analyst with BMO Capital Markets, wrote in a statement Tuesday that he expects the price environment to normalize once the plants go fully into production. Most large restaurant chains have contracts with their main suppliers to protect them from short-term outages like the JBS attack, according to Strelzik.

“We don’t expect any significant margin impact for restaurants that adopt a relatively quick fix,” he said.

Longer impacts on JBS operations could have bigger ramifications for restaurants that serve beef, including shortages or prolonged inflation.

Truist analyst Jake Bartlett compared the situation to a fire at a Tyson Foods plant in 2019 that affected 5% to 6% of US supply and led to a surge in beef prices the following month.

“The shutdown of the JBS facility is affecting more of the supply, but the supply disruption is likely to be for a much shorter period of time (the Holcomb facility reopened in ~ 5 months),” wrote Bartlett. “This is a bad time to disrupt supply, however, as increasing demand is already straining the supply chain.”

The summer months are already a time of higher demand for beef as the barbecue season begins. Bartlett said he didn’t know which restaurant chains depend on JBS for their beef supplies, but pointed out that Texas Roadhouse, Shake Shack, Burger King franchisees Carrols Restaurant Group, Cracker Barrel and Darden Restaurants are the companies he’s working with covers the highest exposure to beef.

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Health

Analysts level to promising pipeline regardless of Covid vaccine jitters

AstraZeneca issues updated phase three trial data

A healthcare worker prepares to inject a vaccine against AstraZeneca coronavirus disease (COVID-19).

Eloisa Lopez

The AstraZeneca Covid-19 vaccine controversy has sparked some investor concerns about its stock, according to Jefferies – but it’s not all bad news for the UK pharmaceutical company.

Australia, the Philippines and the African Union have either contained or abandoned proposed Oxford-AstraZeneca University coronavirus purchases due to possible links to blood clots.

This came after UK health and vaccine regulators issued a change to guidelines on Wednesday on who should get the shot, suggesting that those under 30 should be given an alternative vaccine. Both UK and European Medicines Regulators (MHRA and EMA, respectively) have stressed that the benefits of the sting still outweigh the risks, but EU leaders have yet to agree on a common policy on the shots.

In a research report earlier this week, Jefferies Research Analyst Peter Welford said he received a pushback from customers because he recently decided to buy AstraZeneca’s shares to buy based on the “noise” about the vaccine .

This is despite the fact that the company has promised that the vaccine will be non-profit making for the “duration of the pandemic” and that it will be offered to low- and middle-income countries on a permanent basis.

The overall risk of blood clots has been estimated at around one in 250,000 and British policymakers and health experts have rushed to defend the vaccine in recent days.

Welford noted that, despite the company’s “notable successes” in gaining regulatory approval and accelerating the manufacture of its profitable vaccine, safety concerns expressed in Europe “are of paramount concern to many generalists.”

“We see FDA emergency use approval and UK / EU dose distribution agreements as key to moving the debate beyond the COVID-19 vaccine, despite concerns that it will be a distraction for management,” he explained.

The vaccine has been approved for use in the UK, Europe and other countries, and hundreds of millions of doses have been ordered from countries around the world. However, no emergency permit has yet been issued in the United States

Jefferies thought outside the box and upgraded AstraZeneca to buy in mid-March. He noted its “compelling growth profile within the EU pharmaceuticals industry” and its relative discount based on the expected strategic benefits of the $ 37 billion acquisition of Alexion Pharmaceuticals in the third quarter.

Welford defended the move by highlighting that 15 times the company’s estimated price-earnings ratio by 2022 – a mechanism for determining whether a company’s stock is fairly valued – is similar to its peers despite its “leading growth profile” .

Promising pipeline

AstraZeneca was trading on the London Stock Exchange on Friday at £ 7,337 a share and Jefferies has set a price target of £ 8,850. In Wednesday’s research note, Welford again pointed to several catalysts in the pipeline that could drive stocks higher in the coming months.

The phase 3 study data for the breast cancer treatment enhertu is expected to be available in the second half of 2021, along with possible approvals for the anifrolumab drug for the treatment of lupus. Jefferies is also anticipating approvals for the asthma drug tezepelumab in the first half of 2022 after “impressive” phase three data and a long delayed approval for the anemia candidate Roxadustat in the second half of 2021. Updated first and second phase data from Lung cancer datopotamab is also expected soon.

In a recent announcement, Damien Conover, Director of Healthcare Equity Research at Morningstar, said of AstraZeneca, “The strong overall innovation that has come from the vaccine and pipeline strengthens our beliefs in the company’s vast moat.”

He added that AstraZeneca had “made progress in addressing areas of unmet medical need” and forecast that data from the company’s Phase 3 trial of Farxiga treatment for conserved heart failure would likely lead to approval of the drug.

Conover rated anifrolumab as a “higher regulatory risk”, while roxadustat was rated as a “medium risk” and tezepelumab as a “lower risk”.

“In the longer term, we are encouraged by the robustness of the early-stage pipeline and the opportunities to develop combinations with Farxiga appear well-positioned to address several major cardiometabolic indications where unmet medical needs remain high,” said Conover. He added that Morningstar also remains bullish on AstraZeneca’s cancer drugs pipeline.

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World News

GDP development goal over 6% is straightforward to succeed in, analysts say

GDP growth target over 6% is easy to reach, analysts say

China’s target of more than 6% growth for 2021 isn’t very telling as it’s easy to achieve – but that’s not necessarily a bad thing, analysts told CNBC this week.

“It’s almost the same as having no growth target there because it’s so easy to get to,” said Michael Hirson, head of the Eurasia Group for China and Northeast Asia.

Simon Baptist, chief economist at the Economist Intelligence Unit (EIU), echoed the same sentiment.

“It will be easy to get to,” he told CNBC’s Street Signs Asia on Thursday. “It’s kind of a goal that you have when you don’t really want a goal.”

Chinese Premier Li Keqiang announced last week that the country is targeting economic expansion of more than 6% this year. He spoke at the opening ceremony of the National People’s Congress in China.

Speaking to reporters on Thursday evening, at the end of the annual parliamentary session, Li said China’s target is not low. The 2021 target should be the same as 2022 to avoid large swings, he said.

“By setting the GDP growth target above 6%, we have left options open, which means that there may be even faster growth in actual delivery,” said the Prime Minister.

The EIU predicts China’s growth will be 8.5% this year, more than 2 percentage points higher than the official target, Baptist said.

Focus on quality

To be clear, having an easy-to-achieve goal isn’t pointless, analysts said.

Eurasia’s Hirson said this was in line with China’s desire to put quality over quantity.

“It brings a message home to local authorities and the rest of the system: don’t strive for growth goals, focus on the quality of growth, and I think that’s spot on,” he told CNBC’s Street on Thursday Signs Asia “.

Additionally, he noted that the country’s five-year plan does not have an average growth target, showing “persistent de-emphasis on reaching rigid” numbers.

Baptist from the EIU said previous growth targets have historically created “dangerous imbalances in the Chinese economy”, including debt accumulation, as the country pushed certain sectors to meet these “very ambitious goals”.

However, with the number low for 2021, these issues are unlikely to be fueled any further, he added.

“Indeed, the fact that it is so far below what China is likely to achieve only at a gallop shows that China’s economic policy will be a little tight and that fiscal and monetary support will decline,” he said.

Categories
Health

Johnson & Johnson Covid vaccine: Analysts are cautiously optimistic

Johnson & Johnson Covid vaccine: Analysts are cautiously optimistic

Illustration of the Johnson & Johnson coronavirus vaccine

Given Ruvic | Reuters

LONDON – Health systems around the world are struggling to cope with the rising number of Covid-19 infections as they race against the clock to vaccinate the vulnerable.

The three vaccines currently approved for use in large Western economies all require two separate vaccinations. Given the limited supply, governments are considering controversial tactics such as increasing the time between doses in order to get at least one dose to as many people as possible.

A one-shot vaccine could vastly improve our ability to fight the virus – and we may have one soon.

J & J’s late trial

Johnson & Johnson is expected to deliver preliminary late-stage study results for its single-dose Covid vaccine candidate by the end of January. If the push turns out to be safe and effective, the company will aim to have at least 1 billion doses by the end of the year.

The J&J vaccine was developed by the company’s Belgian unit, Janssen Pharmaceutica, and is based on adenovirus viral vector technology, the same approach used to make the Oxford-AstraZeneca University vaccine. This type of shot is easier to scale than those developed by Pfizer-BioNTech and Moderna, which are based on messenger RNA technology.

Shore Capital health analyst Adam Barker said in an email to CNBC last week, “The J&J vaccine is more like the AstraZeneca vaccine, but uses only one dose. So we know this approach works (viral vector) and we know the goal will work. But we have to see what a dose does. “

The Morgan Stanley health team said in a research report released last week that J & J’s vaccine “offers unique elements and efficacy that could be positive compared to AstraZeneca, increasing confidence in pandemic response and recovery Strengthens the market “.

The investment bank is confident in the vaccine’s safety profile, given early trial data, “along with the previous success and safety profile demonstrated in its Ebola vaccine and research use in HIV, RSV and Zika”.

A report by the Tony Blair Institute for Global Change, founded by the former UK Prime Minister, calls the AstraZeneca and Johnson & Johnson jabs “the two workhorse vaccines” because they should be widely available and easier to administer than those mRNA shots.

With J & J’s technology, the vaccine is estimated to be stable for at least three months at normal refrigeration temperatures, so no new infrastructure is required for transportation.

Expected timeline

On December 17th, J & J completed the registration of its phase 3 clinical trial with 45,000 participants for its single-dose vaccine candidate. Preliminary data from the study is expected to be available by the end of the month.

If the data suggests the vaccine is safe and effective, the company is expected to file an application for approval for emergency use with the U.S. Food and Drug Administration in February. Other health regulatory applications around the world are expected to be paralleled.

Supply contracts

The company is committed to selling the vaccine on a non-profit basis for emergency use.

J&J entered into an agreement with the United States in August 2020 to supply 100 million doses of the vaccine after FDA approval or approval and the option to purchase up to 200 million additional doses under a subsequent agreement.

The UK negotiated a deal in August to purchase an initial 30 million doses of the J&J vaccine, with the option to purchase up to 22 million additional doses. The EU signed a contract with J&J in October to supply up to 400 million cans.

J & J has also agreed to provide up to 500 million doses of its vaccine to lower-income countries through COVAX under a fundamental agreement with The Vaccine Alliance (Gavi), which is responsible for equitable access to vaccines. These doses will be distributed through 2022, when the vaccine candidate is approved for use.

“If J & J’s Ad26 platform is able to achieve over 80% efficacy from a single dose, we would consider that a compelling result given the vaccine’s favorable handling requirements and significant manufacturing scale,” said Morgan Stanley.

Jonathan Reiner, Professor of Medicine and Surgery at the George Washington University School of Medicine and Health Sciences, argues, “The J&J vaccine is why we shouldn’t ditch the two-dose strategy for Pfizer-BioNTech and Moderna. We’ll probably have all the vaccines we need. We need to focus on getting the vaccines into our arms. “