Endo International plc – Ordinary Shares (NASDAQ:ENDP) just released strong second-quarter results, posting revenue of $920.9 million and EPS of $0.86, compared to the Street’s projection of $864.4 million and EPS of $0.75. ENDP management reiterated its past guidance for the fiscal year of 2016 of $3.87 to $4.03 billion in revenue and adjusted EPS of $4.50 to $4.80.
In reaction, Mizuho top analyst Irina Rivkind Koffler upgrades ENDP from Neutral to Buy and raises the price target from $16 up to $29, which represents a nearly 20% increase from where the shares last closed. Furthermore, Koffler has lifted her estimates from $3.92 billion in revenue and $4.36 in adjusted EPS up to $3.96 billion and $4.51, respectively.
In the wake of a stabilized generic platform and reasonable branded and international segment predictability, Koffler no longer believes ENDP stock presents such a risk. Endo has reorganized itself in a way Koffler thinks will simplify the company’s ability to sell assets in the long-term. Paired with multiple possible expansion gains and the immense likelihood that third quarter results will continue this successful surge, Koffler has become bullish on the company.
Endo’s third quarter guidance can likely be beat, which in Koffler’s view, will only serve to accelerate the company’s rising momentum. ENDP guidance for third-quarter revenue is in the range of $830 to $870 million and for EPS of $0.77 to $0.82, which Koffler deems “too low,” modeling in comparison a forecast of $881.7 million in revenue and of $0.83 in EPS. Koffler explains, “[…] we expect a boost from Xiaflex stocking, and continued improvement from generic gross margin as the older base business erodes.”
Koffler concludes, “In addition to lowered risk we have a slightly improved outlook on fundamentals. We like the directional changes in the business. […] Endo continues to invest behind Xiaflex which may increase product attractiveness to a strategic buyer.”
According to TipRanks, top five-star analyst Irina Rivkind Koffler has achieved a high ranking of #16 out of 4,110 analysts. Koffler steadily upholds a 50% success rate while realizing 24.6% in her average returns. However, when recommending ENDP, Koffler faces a loss of 1.4% in average profits on the stock.
TipRanks analytics exhibit ENDP as a Buy. Based on analysts polled by TipRanks in the last 3 months, 50% rate a Buy on Endo, while 50% maintain a Hold. The consensus price target stands at $28.18, marking a 16% upside from where the stock is currently trading.
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