Elanco (ELAN) Price Target Raised at Citi Ahead of Investor Day
- Wall Street falls with Amazon; S&P 500 posts sixth straight month of gains
- Amazon (AMZN) Plunges After Missing Sales and Guidance Expectations, Analysts Slash PTs to Reflect Weaker Guidance
- Pinterest (PINS) Tops Profit and Sales Views, But Shares Plunges Over 20% on a Big Monthly User Miss to Prompt Two Downgrades
- 'I'm CEO.' New Book Outlines Merger Conversations Between Elon Musk and Tim Cook
- Bullard: Fed should taper this fall, go "fairly rapidly" to end early 2022
(Updated - November 17, 2020 9:09 AM EST)
(updated to add analyst comments)
Citi analyst Navann Ty raised the price objective on Elanco Animal Health (NYSE: ELAN) to $35.00 per share (from $32.00) ahead of Investor Day.
The company is expected to announce the launching of five new products by the end of 2021E and 25 by 2024E. Investors will be looking towards Investor Day, which is due in mid-December for more details.
“At a minimum, we will look out for a blockbuster product candidate (>$100mn in potential sales) that will compete in a large market (e.g., parasiticides, atopic dermatitis, or pain).
Management also indicated it will provide more details on its long-term margin expansion and its 2020-2021E guidance,” Ty wrote in today’s note.
The analyst also took note of Sachem Head investment in the company. Last month, Sachem acquired a $1.2 billion stake in Elanco with an aim to push for changes at the company.
“We view positively Sachem Head’s involvement in Elanco (~5.9% of the outstanding Elanco shares), which may help Elanco to improve its top-line growth closer to the industry level and execute on its margin expansion program and synergies. Its role in Elanco may be similar to Sachem Head & Pershing Square’s past involvement in Zoetis, we think.”
Finally, Ty adds that Bayer may not take its option to sell up to 50% of its stake in Elanco immediately.
“Bayer commented it intends to divest the stake in Elanco “in due course”. The intention to divest the Elanco stake is consistent with Bayer’s deleveraging priority, in our view. Bayer management also previously commented it will monetize the shares under the right market conditions. We believe Bayer has flexibility regarding the timing of the monetization, having an adequate liquidity and good access to debt capital markets,” Ty concludes.
You May Also Be Interested In
- IDEXX Laboratories (IDXX) PT Raised to $700 at Stifel
- Sanofi (SAN:FP) (SNY) PT Raised to EUR80 at Deutsche Bank
- Champion Iron Ltd. (CIA:CN) (CIAFF) PT Raised to Cdn$8.50 at TD Securities
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change
Related EntitiesPershing Square Capital, Citi, Sachem Head Capital
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!