Zacks Analyst Blog Highlights: Schering-Plough, Pfizer, Bristol-Myers, Citigroup and Credit Suisse Group

CHICAGO--(BUSINESS WIRE)--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: Schering-Plough (NYSE: SGP), Pfizer (NYSE: PFE), Bristol-Myers (NYSE: BMY), Citigroup (NYSE: C) and Credit Suisse Group (NYSE: CS).

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Here are highlights from Wednesday’s Analyst Blog:

Foreign Exchange & Big Pharma

Large-cap pharmaceutical companies, like many companies with significant international operations, saw financial results in 2008 affected by foreign currency translation.

U.S. companies with significant European operations benefit when the U.S. dollar weakens. A stronger Euro or British Pound means more U.S. dollars when European currency denominated revenues are repatriated to the U.S. and converted to dollars. The opposite is true when the U.S. dollar strengthens.

Schering-Plough (NYSE: SGP) and Pfizer (NYSE: PFE) with 70% and 58% of total 2008 sales, respectively, coming from outside the U.S. were among the largest beneficiaries of a weaker U.S. dollar in the large-cap pharmaceutical space.

Bristol-Myers (NYSE: BMY) is one of the least-exposed large-cap pharma companies to currency volatility with only 41% of revenues coming from overseas.

Last Move Before Nationalization?

The window of opportunity appears to be closing for financial institutions with respect to correcting their ills before the potential for some entities to be nationalized becomes a reality. With the government willing to increase its stake in Citigroup (NYSE: C) up to 40%, this creates substantial doubt as to the ability of the company to remain independent.

As of this juncture, we would submit there still a window of opportunity for financial institutions to significantly self-correct.

Credit Suisse Estimates Lowered

On February 11, 2009, Credit Suisse Group (NYSE: CS) posted a net loss from continuing operations of CHF5.5 billion, which was worse than our estimate, largely reflecting higher-than-expected trading losses and CHF833 million in costs related to accelerated implementation of CS’s strategic plan to restructure the investment bank. Results benefited from CHF2.1 billion accounting gain from the widening of credit spreads on CS’s own debt.

The investment bank will reduce risk-weighted assets by 43%, headcount will be cut by 5,300 (of which 2,600 was reflected in 2008, with the balance in first half 2009), and total costs will fall by CHF2 billion. In other news, Credit Suisse raised CHF11.2 billion in Tier 1 capital, resulting in a 13.3% Tier 1 capital ratio at 2008 year-end, and cut the dividend to CHF0.10 from CHF2.50 in 2007.

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