Depomed (DEPO): Raising PT to $27 - Mizuho

September 19, 2016 9:23 AM EDT
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Price: $18.25 -1.35%

Rating Summary:
    10 Buy, 4 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 18 | Down: 17 | New: 10
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Mizuho Securities analyst, Irina Koffler, reiterated her Buy rating on shares of DepoMed Inc (NASDAQ: DEPO) and raised her price target to $27 from $23 after extending her model to 2024 to incorporate a longer-term view of the business. The analyst believes a 2024-2025 settlement for Nucynta/ ER would allow her to model the patent cliffs for the remainder of DEPO's portfolio.

A takeout seems more likely however. Horizon acquired RPTP for 6.6x LTM Procysbi sales but the analyst thinks that DEPO's lower margin pain drugs could go for a lower 5x sales multiple. If she applies a multiple of 5x to a 2017 estimate of $545M, and subtracts net debt of $346M, the analyst arrives at a takeout per share value of $29.

For an analyst ratings summary and ratings history on DepoMed Inc click here. For more ratings news on DepoMed Inc click here.

Shares of DepoMed Inc closed at $24.34 yesterday

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