What to Expect From Mylan Earnings

Health and Healthcare

Published: October 29, 2015 1:05 pm

Mylan N.V. (NASDAQ: MYL) is scheduled to release its third-quarter financial results before the markets open on Friday. The consensus estimates from Thomson Reuters call for $1.38 in earnings per share (EPS) on revenue of $2.78 billion. In the same period of the previous year, it posted $1.16 in EPS on $2.08 billion in revenue.

The company owes its recent pullback entirely to itself, even if it would like to blame Teva. Mylan successfully fended off Teva’s buyout ambitions, and now Mylan is in the process of trying to acquire Perrigo. As Teva failed to win it over, this removed all the buyout premium that investors had baked into Mylan shares.

A recent court victory in Israel now allows Mylan to list its shares on the Tel Aviv Stock Exchange. This company is literally stalking Perrigo to this exchange in its attempt to acquire it.

The issue to consider now is that Mylan has a very solid position and growth history in the realm of making generic drugs. Generic drug growth ahead also will be a big opportunity, and generic drug companies have serious pricing power, currently and ahead, as well. Mylan also is not an expensive stock at 16 times last year’s earnings, and it is even cheaper at less than 11 times a blended 2015/16 earnings estimate.

Ahead of the earnings report, a few analysts weighed in on Mylan:

Barclays initiated coverage with an Equal Weight rating and a $57 price target.
BMO Capital Markets has a Market Perform rating and lowered its price target to $46 from $54.
Leerink Swann reiterated a Buy rating with a $60 price target.

So far in 2015, Mylan has underperformed the market, with the stock down over 20% year to date. Over the past 52 weeks, the stock is down 13%.

Shares of Mylan were trading up 2.5% at $46.00 Thursday afternoon, with a consensus analyst price target of $65.33 and a 52-week trading range of $37.59 to $76.69.

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