BTIG Thinks Post-Q3 Selloff in Shire (SHPG) is Overdone; Affirms 'Buy' Rating
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BTIG affirms Shire plc (Nasdaq: SHPG) at Buy with a price target of $242 after the company posted Q3 results Tuesday morning.
Analyst Timothy Chiang commented,
This morning, Shire reported 3Q total revenues of $3,452M (vs. our $3,477M est.) with adj. EPS of $3.17 (vs. our $3.29 est.). Gross margins were ~75% with operating margins of ~40%. Tax rate was lower than expected at 13%. While the Co. did reiterate its full year 2016 financial guidance, which includes product sales of $10.8 - $11B and adj. EPS of $12.70 - $13.10, the shares are down ~2% this morning. The culprit appears to be weaker than expected sales from the Hematology segment which declined 6% YOY. Shire highlighted that pro forma growth in this segment was mostly in line with market trends, but was impacted by the timing of large orders.
While we recognize investors’ concerns with the Co.’s hematology segment, we believe it is unlikely that patients (mostly children) would switch to other clotting factors due to safety concerns. We believe management is up to the task of integrating Baxalta, while commercializing new products like Xiidra.
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