Canaccord Genuity Boosts Target on Mylan (MYL), Answers 5 Key Questions

November 28, 2012 9:03 AM EST Send to a Friend
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Price: $50.77 +0.97%

Rating Summary:
    10 Buy, 5 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 20 | Down: 10 | New: 7
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Canaccord Genuity lifted estimates and its price target on Buy-rated Mylan (NASDAQ: MYL) from $30 to $31.

The firm addresses five recurring questions they're getting:

(1) What does the credit upgrade mean? Two things: (i) we still think a 1H2013 accretive deal is likely and now at a lower financing cost; (ii) we expect buy-back activity in addition to M&A (could add ~ $0.10 or 3%).

(2) Does the generic Lipitor recall have P&L implications? It’s limited but pricing likely moves higher off low levels. Broader implications are more interesting (ramp in FDA foreign site inspections, supply security, etc.).

(3) Has EMEA hit an inflection point? It’s still early, but we think so. Expectations reflect uncertainty, and we see more upside than downside.

(4) What will be the AUVI-Q impact on EPIPEN? We think modest but model cautious TRx growth. That said pricing is still the big driver and if annual increases remain ~ 20-30% we’ll need to revisit our newly raised forecasts that have our ‘14-16 EPS 2-3% higher this morning.

(5) What are we most concerned about? US generics growth with tough comps and low visibility reflected in our 1% CAGR through ‘16. But expectations are also low with our and Street consolidated revenue forecasts 2% and 5% below guidance for ‘13 and we think largely driven by more cautious US generic assumptions leaving a low hurdle.

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

Shares of Mylan closed at $27.20 yesterday.




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