Piper Jaffray Upgrades Akorn (AKRX) to Overweight
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(Updated - September 15, 2016 10:11 AM EDT)
Piper Jaffray upgraded Akorn (NASDAQ: AKRX) from Neutral to Overweight with a price target of $34. Analyst David Amsellem noted favorable/stable dynamics surrounding key products in the base generics business.
Amsellem explained, "Though there is still uncertainty over the longer-term trajectory and competitive dynamics surrounding injectable ephedrine (which accounted for 21% of 2Q16 sales), a closer look at overall volume trends across the AKRX commercial portfolio suggests to us that the base business is on sustainable footing. That dynamic along with a deep pipeline (85+ pending abbreviated NDA (aNDA) filings) makes it easier for us to envision at least modest earnings growth in 2017 even in the face of pressure on ephedrine, and with the impact of new approvals, accelerating EPS growth beyond 2017. This points to an attractive valuation in the context of a P/E of 12x our 2017 EPS estimate of $2.38 (and the strong balance sheet, with debt/EBITDA of 1.3x, doesn't hurt either)."
Shares of Akorn closed at $27.56 yesterday.
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