Mylan (MYL): Don't Get Too Excited - RBC
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RBC Capital analyst, Randall Stanicky, reiterated his Sector Perform rating on shares of Mylan (NASDAQ: MYL) as the DOJ Epipen settlement removes the immediate overhang but notes that questions will linger on the P&L outlook. On Friday after the close MYL announced a $465 million settlement with the DOJ/others regarding Epipen classification for the Medicaid Drug Rebate Program. MYL also tempered 2016 EPS guidance, reiterated its commitment to its $6.00 2018 EPS target and set a Nov 9 earnings date. The bottom line is, expect a short-term bounce but 2017 P&L uncertainty remains.
The analyst revisited his Epipen model in detail, building in a 50/50 MYL brand/generic split in 2017 with a TEVA generic adding further impact in 2018. The Epipen EPS contribution moves from $1.06 in 2016 to $0.59 in 2018E. The new 2016-18E EPS of $4.75, $5.54 and $5.74 move lower by 1-6% to 3-6% below consensus and well below for 3Q which MYL will report on Nov 9 after market.
No change to the $48 PT.
Shares of Mylan closed at $35.94 yesterday.
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