Zacks Analyst Blog Highlights: EOG Resources, XTO Energy, Transocean, Diamond Offshore and NeurogesX

Business Wire, June 11, 2009

http://www.profit.zacks.com/

CHICAGO -- 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: EOG Resources (NYSE: EOG), XTO Energy (NYSE: XTO), Transocean (NYSE: RIG), Diamond Offshore (NYSE: DO) and NeurogesX (Nasdaq: NGSX).

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Here are highlights from Wednesday’s Analyst Blog:

Exports & Imports Still Falling

In April, we exported $121.1 billion, a 2.3% decline from March exports of $123.9 billion. We imported $150.3 billion a 1.4% decline from March imports of $152.5 billion. Put another way, in April we exported $0.806 for every $1.00 we imported, in March we exported $0.812 for every $1.00 we imported. However, in April of 2008 we exported just $0.713 for every dollar of imports.

One non-oil area that also deteriorated in April was the trade deficit with China, which expanded to $16.8 billion from $15.6 billion in March.

While the very strong rebound in oil prices (more than doubled from their lows) is good news for E&P companies like EOG Resources (NYSE: EOG) and XTO Energy (NYSE: XTO), it is probably even better news for the deepwater drillers like Transocean (NYSE: RIG) and Diamond Offshore (NYSE: DO). It is not good news for the rest of the economy, and by extension the rest of the market.

The current price level of oil is not yet fatal to hopes that the economy might recover, but it sure does not help matters. It is one more factor that suggests that if we get an end to the recession in the second half of the year that it will be extremely anemic, with unemployment continuing to rise well into 2010, and most likely clearing the 10% level before this year is over.

NeurogesX Momentum Continues

NeurogesX (Nasdaq: NGSX) stock has been on a tear lately. With the drug now approved in Europe and nearing approval in the U.S., the market is clearly coming to grips with the power of Qutenza.

Even though the shares are up over 100% since the beginning of the year, several significant catalysts remain. We expect the company to secure a pan-European commercial partner for Qutenza in the next few months. U.S. regulatory approval will probably be delayed until November 2009, but management should be able to quickly complete and file the 20-patient topical anesthetic tolerability program in July. Upside could come if the FDA does act positively in August.

And finally, we expect Qutenza to become available in both the U.S. and EU in early 2010. Peak sales in the PHN indication are at least $250 million, with upside to that figure based on off-label use in HIV-DSP and PDN.

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