>>> BoJ is reportedly planning to raise its FY14 inflation target if April data

BoJ is reportedly planning to raise its FY14 inflation target if April data for Tokyo is strong, may project 2% inflation for FY15-16 - financial press 

**Reminder: On Apr 15th BOJ Gov Kuroda reiterated Japan can meet its 2% inflation target from end of FY14 to FY15 period as BOJ easing was having intended effect 

**Note: Japan April Tokyo CPI and and March National CPI due for release on Friday, Apr 25th

(Jeffries) Shire - US ADHD Headwinds but Compelling

US ADHD Headwinds but Compelling Valuation for Growth

* Key Takeaway
We are trimming EPS up to 2% mostly on the sluggish 1Q US ADHD
prescription trends, with the market actually declining c.-1% and Vyvanse's
share stagnating. We still believe robust +13% EPS CAGR 2013-18E, at a
minimum given pipeline news and further cost control, justifies upside for the
shares; hence we reiterate our Buy. We view the recent share price weakness to
be an attractive buying opportunity.

* Trimming EPS c.0-2% of US ADHD: The US ADHD market slowed in 2013 but in 1Q14
may actually have stalled, driving our lower Vyvanse sales estimates. These downgrades are
somewhat offset by higher Cinryze and Firazyr, but still yield 0-2% lower earnings. Despite
the somewhat disappointing US ADHD trends, we remain bullish on the stock given the clear
evidence of cost control, plus the outstanding potential for pipeline news, which together
could accelerate EPS growth and justify multiple expansion. The substantial cash flows also
facilitate possible accretive company or product acquisitions.

* Pipeline can still boost momentum: Pipeline focus is increasingly on rare orphan
diseases, potentially putting pressure on management to execute more BD deals and/or
M&A, in our view. We view Premiplex (peak $650m) to be perhaps the most overlooked
programme, which "best case" could reduce complications for preterm infants triggering
an accelerated regulatory filing after data 1H15E. Lifitegrast (peak $400m) for dry eye disease
is theoretically a substantial commercial opportunity, but pending 1H14E FDA discussions
post equivocal Phase III data we cap its possible contribution. Despite recent positive
Vyvanse binge eating (BED; peak $500m) pivotal results, we have lingering regulatory
concerns, but we acknowledge that, if approved, it would be the only drug to treat BED and
a "bull" case on S&M raising diagnosis rates could be up to $1bn peak.

* Attractive valuation: On just c.14x 2015E, the shares are trading below an average 15.5x
12-month forward consensus, which we believe offers a compelling entry-point given the
robust earnings growth.

* Valuation/Risks
Our 3550p/share Price Target assumes the bottom-end of the historical 1.3-1.6x PEG range
for 17x 2015E P/E given a +13% EPS CAGR. NPVs suggest fair value c.2440p per share. Risks
include: (1) Vyvanse pricing pressure or loss of market share; (2) slower HGT sales growth;
and (3) late-stage pipeline failures.

>>> AK Steel beats by $0.03, misses on revs

AK Steel beats by $0.03, misses on revs

Reports Q1 (Mar) loss of $0.40 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of ($0.43); revenues rose 1.0% year/year to $1.38 bln vs the $1.40 bln consensus.
  • Average selling price was $1,096 per ton, a 3% YoY increase. The increase in average selling price was principally due to a richer shipment mix of value-added products.
  • "Our first quarter results were negatively impacted by extreme cold weather in the U.S., as well as planned and unplanned outages at our Ashland Works. Having worked through those challenges, we believe that AK Steel is well-positioned for a much improved second quarter."

>>> Liberty Prop misses by $0.01, reports revs in-line; guides FY14 FFO in-line

Liberty Prop misses by $0.01, reports revs in-line; guides FY14 FFO in-line

Reports Q1 (Mar) funds from operations of $0.58 per share, $0.01 worse than the Capital IQ Consensus Estimate of $0.59; revenues rose 11.9% year/year to $197.6 mln vs the $196.67 mln consensus.
  • Results for the first quarter of 2014 reflect the sale of 6.6 million square feet of suburban office and flex properties which closed in two installments during December 2013 and January 2014. Year-over-year results are reflective of strategic portfolio transformation activities that have increased Liberty's industrial portfolio and decreased its office exposure.
Portfolio Performance
  • Leasing: At March 31, 2014, Liberty's in-service portfolio of 101.5 million square feet was 91.0% occupied, compared to 91.6% at the end of the fourth quarter of 2013. During the quarter, Liberty completed lease transactions totaling 5.3 million square feet of space.
  • Same Store Performance: Property level operating income for same store properties decreased by 1.4% on a cash basis and by 1.8% on a straight line basis for the first quarter of 2014 compared to the same quarter in 2013.
Guidance
Co issues in-line guidance for FY14, sees FFO of $2.45-2.55 vs. $2.52 Capital IQ Consensus Estimate.

>>> US Gapping down

Gapping down

In reaction to disappointing earnings/guidance: RMBS -7.3%, PHG -7.2%, XRX -5%, RCI -3%, ACI -1.8%, MCD -1.2%, CDNS -0.9% (light volume; also announces agreement to acquire Jasper Design automation for $170 mln in cash; to be accretive to non-GAAP EPS in FY15), LXK -0.6%.

M&A news: AZN -1.4% (Bloomberg discusses that large deals make sense for PFE and AZN), .

A few China related names showing weakness: ZNH -1.4%, CEA -1.1%, CHL -1.0%.

Other news: FEYE -3.4% (filed for 13,282,316 Share common stock offering by holders), ALSN -3% ( announces sale of 25 mln shares of common stock by selling stockholders), SNE -1.6% (still checking), SDRL -1.1% (still checking).

Analyst comments: Z -1% (Zillow downgraded to Fair Value from Buy at CRT Capital), VLO -0.9% (downgraded to Neutral from Buy at BofA/Merrill)

>>> US Gapping up

Gapping up

In reaction to strong earnings/guidance: HOG +7.5%, NFLX +7.2% (also upgraded to Buy from Hold at Cantor Fitzgerald; upgraded to Outperform from Mkt Perform at Raymond James ), PLXT +6.7%, RCII +4.8%, CE +3.6%, HLX +3.3%, (light volume), CMCSA +2.2%, LMT +2.2%, CYS +1.4%, (light volume), CNC +0.3%, TRV +0.2%.

M&A news: AGN +20.1% and VRX +9.9% (Valeant proposes to combine with allergan for $48.30 in cash and 0.83 shares of Valeant stock for each Allergan Share; Valeant Pharma's Q1 is expected to meet or beat consensus Cash EPS expectations), GSK+4.7% (Novartis AG acquires GSK oncology products), NVS +1.2% (Eli Lilly agrees to acquire Novartis Animal Health; Novartis AG acquires GSK oncology products), PFE +0.5% (Bloomberg discusses that large deals make sense for PFE and AZN), .

Select metals/mining stocks trading higher: ABX +2.4% (upgraded to Buy from Neutral at Goldman), VALE +2.2%, GFI +1.3%, GDX +0.9%.

Select solar related names showing strength: JASO +1.8%, FSLR +1.6% (initiated with a Buy at Brean Capital),CSIQ +1.2% ( to Supply 43MW of Solar Modules in Japan), SPWR +0.8% (initiated with a Buy at Brean Capital).

Other news: SPNC +6.1% (attributed to positive analyst mention on CNBC), MHR +5.7% (Magnum Hunter announces execution of a definitive agreement to sell remaining Canadian assets for CAD75 mln), EJ +5.3% (still checking), IMUC +5% ( announces ICT-107 Phase 2 data abstract accepted for oral presentation at the 2014 ASCO annual meeting), RTK +4.1% (Blackstone Group discloses 16.5% stake in 13D filing), WB +3.9% (continued momentum), RVNC +3.6% (announces positive results from the RT002 Phase 1/2 study in glabellar (frown) lines), GILD +2.2% (Gilead Sciences' New Drug Applications for Cobicistat and Elvitegravir for HIV Therapy Accepted by U.S. FDA), SGMS +1.5% (Scientific Games signed a contract with La Francaise des Jeux, the operator of the French National Lottery), BA +1.3% (Shandong Airlines plans to purchase 50 BA aircraft ), CSCO +1.3% (still checking), DEO +1.2% (still checking), TSLA +0.9% (Tesla Motors and Panasonic likely to partner in battery plant, according to reports ), KORS +0.7% (Lone Pine Capital disclosed 5.5% stake in 13G), MU +0.7% ( following positive Barron's mention), LLY +0.6% (Eli Lilly's Cyramza approved by FDA to treat patients with advanced stomach cancer or gastroesophageal junction adenocarcinoma; Eli Lilly agrees to acquire Novartis Animal Health ).

Analyst comments: TWOU +6.1% (initiated by several analysts), RKUS +2.7% (Ruckus Wireless assumed with an Overweight at Piper Jaffray), GWPH +2.5% (initiated with a Overweight at Morgan Stanley), FB +1.9% (upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $87 from $65), PRGO +1.6% (initiated with a Buy at Jefferies), AKRX +1.5% (initiated with a Buy at Jefferies), DYAX +1.5% (Dyax initiated with a Buy at BofA/Merrill), SHPG +1.2% (initiated with a Buy at Jefferies), IMMR +1.1% (initiated with a Buy at B. Riley & Co), HD +0.9% (upgraded to Outperform from Mkt Perform at BMO Capital Mkt)

>>> US Early premarket gappers

Early premarket gappers

Gapping up: AGN +17.6%, VRX +10.3%, NFLX +7.6%, PLXT +6.7%, SPNC +6.1%, IMUC +5%, RCII +4.8%, GSK +4.7%, RTK +4.1%, WB +3.9%, RVNC +3.6%, CE +3.6%, HLX +3.3%, GILD +2.2%, ABX +1.9%, SGMS +1.5%, CYS +1.4%, BA +1.3%, CSCO +1.3%, NVS +1.2%, DEO +1.2%, TSLA +0.9%, GDX +0.9%, KORS +0.7%, MU +0.7%, LLY +0.6%, PFE +0.5%

Gapping down: RMBS -8.1%, PHG -7.2%, CDNS -5.7%, ALSN -3%, SNE -1.6%, AZN -1.4%, SDRL -1.1%

(FBR) Valeant Pharma: Thoughts on potential VRX merger with

Valeant Pharma: Thoughts on potential VRX merger with AGN - FBR Capital

FBR Capital views the merger proposed by Valeant with Allergan (AGN-Not Rated) as accomplishing several important strategic goals. First, Valeant's aesthetics franchise could be expanded and enhanced by the additional product offerings. Second, by virtue of synergy capture, they estimate that the merger could be potentially accretive beginning in 2015. Third, Valeant's mgmt has commented that delevering could be accomplished via a merger with a relatively unlevered co and they believe Allergan fits that profile. As to the likelihood that another bidder might emerge, they believe Valeant's willingness to jettison development programs and to recognize operational synergies might position the co well against potential competition.

VRX is +10% and AGN is +18% at a new all time high in the premarket on reports of a potential deal.