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Cowen Raises Celgene Price Target To $96 Following Q214 Results

In a report issued Thursday, Cowen analyst Eric Schmidt reiterated coverage with an Outperform rating on shares of Celgene (CELG) and increased his price target to $96 (from $89), following CELG’s second quarter results, which were released this morning.

Schmidt noted, “Celgene reported 18% Y/Y product sales growth, a modest acceleration from prior years, driven by volume gains (14%), pricing (3%) and Fx (1%). Revlimid sales of $1.214B (+15% Y/Y, vs. consensus of $1.216BE) were strong in the U.S., but were weak ex-U.S. on the timing of shipments to Latin American distributors. Abraxane ($215MM +39% Y/Y; vs. consensus of $212MME) continues to benefit from steady WW uptake in pancreatic cancer. Pomalyst sales of $161MM (+143% Y/Y, vs. consensus of $149MME) are benefiting from broader ex-U.S. reimbursement. While product sales failed to meet the high end of expectations, slightly better operating margins (51.1% vs. our 49.4%E), a modestly lower tax rate (16.0% vs. our 16.5%E) and share repurchases contributed to EPS upside relative to our mode”.

The analyst continued, “Celgene increased 2014 total revenue guidance to ~$7.6B vs. prior ~$7.5B. Consensus is $7.54B. Guidance for Revlimid was narrowed and that for Abraxane was confirmed, so it appears the upside is related to Pomalyst and other smaller products. The company also increased non-GAAP EPS guidance to $3.60-3.65 vs. prior $3.50-3.60. Much of this increase reflects a lower share count (a $0.07 contribution). Consensus 2014 EPS is already $3.66. Given Celgene’s track record, we have increased our price target from $89 to $96 to reflect a 20X multiple on our new 2015 EPS estimate of $4.80″.

According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Eric Schmidt currently has a one-year average return of 16.6% and a 33% success rate. Schmidt has an 11.9% average profit recommending CELG, and is ranked #930 out of 3222 analysts.

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