Healthcare analysts are heading to sidelines on the pharmaceutical company MannKind Corporation (NASDAQ:MNKD) and global specialty healthcare company Endo International plc (NASDAQ:ENDP), as both companies failed to impress investors in terms of revenue.
In a research report published Monday, Griffin analyst Keith Markey downgraded shares of MannKind from a Buy to a Neutral rating, on the back of a negative sales trend. MannKind shares reacted to the downgrade news, dropping nearly 7% to $2.26.
Markey explained, “Since its launch in February, the inhalable insulin has turned in a less than spectacular performance. It’s second to none in controlling mealtime glucose and it does so with less risk of causing hypoglycemia. Yet, the FDA hobbled marketing efforts by not allowing a label claim of less hypoglycemia despite supporting clinical evidence across a spectrum of HbA1c levels when compared to a rapid acting insulin analog. Moreover, the agency demanded that patients undergo an inconvenient pulmonary function test before being prescribed Afrezza. Eli Lilly and Novo Nordisk, which have the most to lose, entered into contracts with pharmaceutical benefits managers last year that are slowing insurance coverage of Afrezza. And Sanofi has put more funds behind its new long-acting insulin Toujeo than it has Afrezza, as evidenced by numerous TV ads for Toujeo and none for Afrezza.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Keith Markey has a total average return of -19.8% and a 26.3% success rate. Markey has a -46.7% average return when recommending MNKD, and is ranked #3692 out of 3842 analysts.
Out of the 8 analysts polled by TipRanks, 1 rate MannKind Corporation stock a Buy, 3 rate the stock a Hold and 4 recommend Sell. With a downside potential of 6.4%, the stock’s consensus target price stands at $2.13.
Endo International plc
Taking the same route, Mizuho Securities analyst Irina Rivkind Koffler downgraded shares of Endo International (NASDAQ:ENDP) from a Buy to Neutral rating, while slashing the price target to $55 (from $82), as Endo’s disappointing international business is expected to remain weak into next year.
Koffler commented, “ENDP already sold off after a disappointing 3Q:15 but we are not expecting the stock to rapidly recover: Endo reported revenue of $745.7M and EPS of $1.02 compared to consensus estimates of $737.6M and $1.00. Despite the beat, management did not raise 2015 guidance, which was kept at $3.22B-$3.27B in revenue and $4.50-$4.60 EPS. Management also maintained 2016 EPS guidance of $5.85-6.15. We think that this 2016 number is beatable in light of an unexpected $250M share buyback announced for 4Q:15 and now model 2016 EPS of $6.35.We are downgrading the stock to Neutral based on valuation, our concerns about persistent weakness in the branded business, and lack of defensiveness in generic stocks.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Irina Rivkind Koffler has a total average return of 41.4% and a 65% success rate. Koffler has a -0.6% average return when recommending ENDP, and is ranked #3 out of 3842 analysts.
Out of the 13 analysts polled by TipRanks, 10 rate Endo stock a Buy, while 3 rate the stock a Hold. With a return potential of 65%, the stock’s consensus target price stands at $93.64.