Cantor Cuts Salix Pharmaceuticals Price Target On Inventory Disclosure

In a research report issued today, Cantor analyst Irina Rivkind reiterated a Buy rating on Salix Pharmaceuticals (NASDAQ:SLXP), but reduced her price target to $127 (from $181), following the company’s third-quarter earnings, posting revenues of $354.7M and non-GAAP EPS of $1.53 versus StreetAccount consensus of $394M and $1.55. 

Rivkind explained, “We have updated our estimates using thirdparty demand data and Salix-provided pricing, and then offset these forecasts with projected inventory work-downs. We now model 2014 Xifaxan revenues of $587M (-9% Y/Y), with mid-single-digit growth in 2015 (post-work-downs). This analysis supports our DCF valuation of $127 and remains the basis of our BUY rating. Furthermore, we continue to believe that Salix may remain an acquisition target during this weakened period since Xifaxan demand remains on a double-digit growth trajectory with a long durability similar to a biologic. We think there could be a number of interested buyers for Salix’s specialty assets and experienced sales force and the inventory fill could be worked down while the deal closes.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Irina Rivkind Koffler has a total average return of 13.7% and a 57.9% success rate. Rivkind Koffler has a 9.1% average return when recommending SLXP, and is ranked #215 out of 3365 analysts.

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