Impax Laboratories (IPXL): Cutting PT To $18 On Teva Price Cuts - RBC
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RBC Capital analyst, Randall Stanicky reiterated his Sector Perform rating on shares of Impax Laboratories (NASDAQ: IPXL) but cut his price target to $18 from $30 after the company became the latest manufacturer to report increasing P&L pressure driven by sector headwinds, as the down-cycle move from peak sector profitability continues.
The analyst stated "IPXL's weakness was amplified by a number of company-specific challenges that collectively should take Street forecasts materially lower next year and add more uncertainty as we head into 2017."
The price cut on a handful of acquired TEVA products came following the 8/2 acquisition and comprised 70% of the guidance reduction. That points to 4Q revenue and EPS of ~$221 million and $0.14, which is 21% and 75% below Street pre-3Q levels. The bigger question mark is where gross margin trends are heading into 2017 as the 4Q implied margin is 43% and well below the YTD 51.1%. Each 100 bps on 2016E equates to $0.08 in EPS.
The 2016 guide down and messaging on the call should take 2017E EBITDA forecasts lower and likely leave a decent spread around consensus.
Shares of Impax Laboratories closed at $14.00 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change, Earnings
Related EntitiesRBC Capital, Definitive Agreement
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